Correlation Between Woodbrook Group and Cathedra Bitcoin

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

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

Diversification Opportunities for Woodbrook Group and Cathedra Bitcoin

-0.11

Correlation Coefficient

Woodbrook Group  Cathedra Bitcoin

Good diversification

The 3 months correlation between Woodbrook and Cathedra is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Woodbrook Group Holdings and Cathedra Bitcoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cathedra Bitcoin and Woodbrook Group 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 Woodbrook Group Holdings are associated (or correlated) with Cathedra Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cathedra Bitcoin has no effect on the direction of Woodbrook Group i.e., Woodbrook Group and Cathedra Bitcoin go up and down completely randomly.

Pair Corralation between Woodbrook Group and Cathedra Bitcoin

Given the investment horizon of 90 days Woodbrook Group Holdings is expected to generate 26.77 times more return on investment than Cathedra Bitcoin. However, Woodbrook Group is 26.77 times more volatile than Cathedra Bitcoin. It trades about 0.22 of its potential returns per unit of risk. Cathedra Bitcoin is currently generating about -0.04 per unit of risk. If you would invest  5.12  in Woodbrook Group Holdings on October 24, 2024 and sell it today you would earn a total of  34.88  from holding Woodbrook Group Holdings or generate 681.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Woodbrook Group Holdings  vs.  Cathedra Bitcoin

Woodbrook Group Holdings

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Woodbrook Group Holdings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent fundamental drivers, Woodbrook Group reported solid returns over the last few months and may actually be approaching a breakup point.

Cathedra Bitcoin

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cathedra Bitcoin has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Woodbrook Group and Cathedra Bitcoin

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

The idea behind Woodbrook Group Holdings and Cathedra Bitcoin 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.