Correlation Between Wallbox NV and ADTRAN

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

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

Diversification Opportunities for Wallbox NV and ADTRAN

0.36

Correlation Coefficient

Wallbox NV  ADTRAN

Weak diversification

The 3 months correlation between Wallbox and ADTRAN is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Wallbox NV and ADTRAN Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADTRAN Inc and Wallbox NV 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 Wallbox NV are associated (or correlated) with ADTRAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADTRAN Inc has no effect on the direction of Wallbox NV i.e., Wallbox NV and ADTRAN go up and down completely randomly.

Pair Corralation between Wallbox NV and ADTRAN

Considering the 90-day investment horizon Wallbox NV is expected to under-perform the ADTRAN. In addition to that, Wallbox NV is 1.98 times more volatile than ADTRAN Inc. It trades about -0.03 of its total potential returns per unit of risk. ADTRAN Inc is currently generating about 0.05 per unit of volatility. If you would invest  830.00  in ADTRAN Inc on December 29, 2024 and sell it today you would earn a total of  60.00  from holding ADTRAN Inc or generate 7.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Wallbox NV  vs.  ADTRAN Inc

Wallbox NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wallbox NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

ADTRAN Inc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ADTRAN Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, ADTRAN may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Wallbox NV and ADTRAN

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

The idea behind Wallbox NV and ADTRAN Inc 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 CEOs Directory module to screen CEOs from public companies around the world.