Correlation Between Wizz Air and Paragon GmbH

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

By analyzing existing cross correlation between Wizz Air Holdings and paragon GmbH Co, you can compare the effects of market volatilities on Wizz Air and Paragon GmbH 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 Wizz Air with a short position of Paragon GmbH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wizz Air and Paragon GmbH.

Diversification Opportunities for Wizz Air and Paragon GmbH

-0.3

Correlation Coefficient

Wizz Air  Paragon GmbH

Very good diversification

The 3 months correlation between Wizz and Paragon is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Wizz Air Holdings and paragon GmbH Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on paragon GmbH and Wizz Air 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 Wizz Air Holdings are associated (or correlated) with Paragon GmbH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of paragon GmbH has no effect on the direction of Wizz Air i.e., Wizz Air and Paragon GmbH go up and down completely randomly.

Pair Corralation between Wizz Air and Paragon GmbH

Assuming the 90 days trading horizon Wizz Air Holdings is expected to under-perform the Paragon GmbH. But the stock apears to be less risky and, when comparing its historical volatility, Wizz Air Holdings is 1.57 times less risky than Paragon GmbH. The stock trades about -0.03 of its potential returns per unit of risk. The paragon GmbH Co is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  369.00  in paragon GmbH Co on October 10, 2024 and sell it today you would lose (157.00) from holding paragon GmbH Co or give up 42.55% of portfolio value over 90 days.

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

Wizz Air Holdings  vs.  paragon GmbH Co

Wizz Air Holdings

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Wizz Air Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Wizz Air may actually be approaching a critical reversion point that can send shares even higher in February 2025.

paragon GmbH

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in paragon GmbH Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Paragon GmbH may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Wizz Air and Paragon GmbH

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

The idea behind Wizz Air Holdings and paragon GmbH Co 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.