Correlation Between West Island and Procyon

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

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

Diversification Opportunities for West Island and Procyon

0.0

Correlation Coefficient

West Island  Procyon

Pay attention - limited upside

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

Pair Corralation between West Island and Procyon

If you would invest  0.35  in West Island Brands on October 7, 2024 and sell it today you would earn a total of  0.00  from holding West Island Brands or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

West Island Brands  vs.  Procyon

West Island Brands

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days West Island Brands has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, West Island is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Procyon

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with West Island and Procyon

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

The idea behind West Island Brands and Procyon 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.