Correlation Between WAVD Old and IBEX

Can any of the company-specific risk be diversified away by investing in both WAVD Old and IBEX at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining WAVD Old and IBEX into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between WAVD Old and IBEX, you can compare the effects of market volatilities on WAVD Old and IBEX and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in WAVD Old with a short position of IBEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of WAVD Old and IBEX.

Diversification Opportunities for WAVD Old and IBEX

-0.49

Correlation Coefficient

WAVD Old  IBEX

Very good diversification

The 3 months correlation between WAVD and IBEX is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding WAVD Old and IBEX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IBEX and WAVD Old is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on WAVD Old are associated (or correlated) with IBEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IBEX has no effect on the direction of WAVD Old i.e., WAVD Old and IBEX go up and down completely randomly.

Pair Corralation between WAVD Old and IBEX

If you would invest  2,033  in IBEX on October 12, 2024 and sell it today you would earn a total of  117.00  from holding IBEX or generate 5.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	0.0%
Values	Daily Returns

WAVD Old  vs.  IBEX

WAVD Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WAVD Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, WAVD Old is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

IBEX

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in IBEX are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile technical and fundamental indicators, IBEX showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with WAVD Old and IBEX

The main advantage of trading using opposite WAVD Old and IBEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WAVD Old position performs unexpectedly, IBEX can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in IBEX will offset losses from the drop in IBEX's long position.

The idea behind WAVD Old and IBEX pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Insider Screener module to find insiders across different sectors to evaluate their impact on performance.