Correlation Between Wilhelmina and CBIZ

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

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

Diversification Opportunities for Wilhelmina and CBIZ

-0.27

Correlation Coefficient

Wilhelmina  CBIZ

Very good diversification

The 3 months correlation between Wilhelmina and CBIZ is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Wilhelmina and CBIZ Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBIZ Inc and Wilhelmina 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 Wilhelmina are associated (or correlated) with CBIZ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBIZ Inc has no effect on the direction of Wilhelmina i.e., Wilhelmina and CBIZ go up and down completely randomly.

Pair Corralation between Wilhelmina and CBIZ

Given the investment horizon of 90 days Wilhelmina is expected to generate 1.26 times less return on investment than CBIZ. In addition to that, Wilhelmina is 2.37 times more volatile than CBIZ Inc. It trades about 0.02 of its total potential returns per unit of risk. CBIZ Inc is currently generating about 0.07 per unit of volatility. If you would invest  4,659  in CBIZ Inc on September 18, 2024 and sell it today you would earn a total of  3,509  from holding CBIZ Inc or generate 75.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.19%
Values	Daily Returns

Wilhelmina  vs.  CBIZ Inc

Wilhelmina

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wilhelmina has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

CBIZ Inc

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CBIZ Inc are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental drivers, CBIZ showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wilhelmina and CBIZ

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

The idea behind Wilhelmina and CBIZ 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.