Correlation Between Web Global and Towpath Technology

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

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

Diversification Opportunities for Web Global and Towpath Technology

0.0

Correlation Coefficient

Web Global  Towpath Technology

Pay attention - limited upside

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

Pair Corralation between Web Global and Towpath Technology

If you would invest (100.00) in Web Global Holdings on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Web Global Holdings or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Web Global Holdings  vs.  Towpath Technology

Web Global Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Web Global Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Web Global is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Towpath Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Towpath Technology has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Towpath Technology is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Web Global and Towpath Technology

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

The idea behind Web Global Holdings and Towpath Technology 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..