Correlation Between World Houseware and Spectral

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

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

Diversification Opportunities for World Houseware and Spectral

0.0

Correlation Coefficient

World Houseware  Spectral

Pay attention - limited upside

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

Pair Corralation between World Houseware and Spectral

Assuming the 90 days horizon World Houseware Limited is expected to generate 0.58 times more return on investment than Spectral. However, World Houseware Limited is 1.71 times less risky than Spectral. It trades about -0.01 of its potential returns per unit of risk. Spectral AI is currently generating about -0.01 per unit of risk. If you would invest  9.00  in World Houseware Limited on October 11, 2024 and sell it today you would lose (4.00) from holding World Houseware Limited or give up 44.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

World Houseware Limited  vs.  Spectral AI

World Houseware

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days World Houseware Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, World Houseware is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Spectral AI

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Spectral AI are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Spectral demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with World Houseware and Spectral

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

The idea behind World Houseware Limited and Spectral AI 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.

Check out your portfolio center.

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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.