Correlation Between Wex and FLT Old

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

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

Diversification Opportunities for Wex and FLT Old

-0.4

Correlation Coefficient

Wex  FLT Old

Very good diversification

The 3 months correlation between Wex and FLT is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Wex Inc and FLT Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FLT Old and Wex 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 Wex Inc are associated (or correlated) with FLT Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FLT Old has no effect on the direction of Wex i.e., Wex and FLT Old go up and down completely randomly.

Pair Corralation between Wex and FLT Old

If you would invest  17,099  in Wex Inc on October 23, 2024 and sell it today you would earn a total of  1,155  from holding Wex Inc or generate 6.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	5.26%
Values	Daily Returns

Wex Inc  vs.  FLT Old

Wex Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wex Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

FLT Old

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Wex and FLT Old

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

The idea behind Wex Inc and FLT Old 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.