Correlation Between Wilhelmina and Viad Corp

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

By analyzing existing cross correlation between Wilhelmina and Viad Corp, you can compare the effects of market volatilities on Wilhelmina and Viad Corp 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 Viad Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wilhelmina and Viad Corp.

Diversification Opportunities for Wilhelmina and Viad Corp

-0.61

Correlation Coefficient

Wilhelmina  Viad Corp

Excellent diversification

The 3 months correlation between Wilhelmina and Viad is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Wilhelmina and Viad Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viad Corp 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 Viad Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viad Corp has no effect on the direction of Wilhelmina i.e., Wilhelmina and Viad Corp go up and down completely randomly.

Pair Corralation between Wilhelmina and Viad Corp

Given the investment horizon of 90 days Wilhelmina is expected to generate 5478.0 times less return on investment than Viad Corp. In addition to that, Wilhelmina is 1.51 times more volatile than Viad Corp. It trades about 0.0 of its total potential returns per unit of risk. Viad Corp is currently generating about 0.17 per unit of volatility. If you would invest  3,258  in Viad Corp on September 12, 2024 and sell it today you would earn a total of  1,226  from holding Viad Corp or generate 37.63% return on investment over 90 days.

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

Wilhelmina  vs.  Viad Corp

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 very healthy essential indicators, Wilhelmina is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Viad Corp

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Viad Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Viad Corp demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wilhelmina and Viad Corp

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

The idea behind Wilhelmina and Viad Corp 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.