Correlation Between WBX WT and SST WT

Can any of the company-specific risk be diversified away by investing in both WBX WT and SST WT 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 WBX WT and SST WT into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between WBX WT and SST WT, you can compare the effects of market volatilities on WBX WT and SST WT 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 WBX WT with a short position of SST WT. Check out your portfolio center. Please also check ongoing floating volatility patterns of WBX WT and SST WT.

Diversification Opportunities for WBX WT and SST WT

0.0

Correlation Coefficient

WBX WT  SST WT

Pay attention - limited upside

The 3 months correlation between WBX and SST is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding WBX WT and SST WT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SST WT and WBX WT 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 WBX WT are associated (or correlated) with SST WT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SST WT has no effect on the direction of WBX WT i.e., WBX WT and SST WT go up and down completely randomly.

Pair Corralation between WBX WT and SST WT

If you would invest  1.90  in SST WT on September 30, 2024 and sell it today you would lose (0.10) from holding SST WT or give up 5.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	7.69%
Values	Daily Returns

WBX WT  vs.  SST WT

WBX WT

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days WBX WT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, WBX WT is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

SST WT

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SST WT are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, SST WT unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with WBX WT and SST WT

The main advantage of trading using opposite WBX WT and SST WT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WBX WT position performs unexpectedly, SST WT 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 SST WT will offset losses from the drop in SST WT's long position.

The idea behind WBX WT and SST WT 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.