Correlation Between Wicket Gaming and Australian Oilseeds

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

By analyzing existing cross correlation between Wicket Gaming AB and Australian Oilseeds Holdings, you can compare the effects of market volatilities on Wicket Gaming and Australian Oilseeds 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 Wicket Gaming with a short position of Australian Oilseeds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wicket Gaming and Australian Oilseeds.

Diversification Opportunities for Wicket Gaming and Australian Oilseeds

0.0

Correlation Coefficient

Wicket Gaming  Australian Oilseeds

Pay attention - limited upside

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

Pair Corralation between Wicket Gaming and Australian Oilseeds

Assuming the 90 days horizon Wicket Gaming AB is expected to generate 0.77 times more return on investment than Australian Oilseeds. However, Wicket Gaming AB is 1.3 times less risky than Australian Oilseeds. It trades about -0.05 of its potential returns per unit of risk. Australian Oilseeds Holdings is currently generating about -0.06 per unit of risk. If you would invest  73.00  in Wicket Gaming AB on September 4, 2024 and sell it today you would lose (63.00) from holding Wicket Gaming AB or give up 86.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	97.78%
Values	Daily Returns

Wicket Gaming AB  vs.  Australian Oilseeds Holdings

Wicket Gaming AB

Risk-Adjusted Performance

0 of 100

Very Weak

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

Australian Oilseeds

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Australian Oilseeds Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Australian Oilseeds may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Wicket Gaming and Australian Oilseeds

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

The idea behind Wicket Gaming AB and Australian Oilseeds Holdings 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.