Correlation Between Wizz Air and Beowulf Mining

Can any of the company-specific risk be diversified away by investing in both Wizz Air and Beowulf Mining 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 Beowulf Mining 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 Beowulf Mining, you can compare the effects of market volatilities on Wizz Air and Beowulf Mining 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 Beowulf Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wizz Air and Beowulf Mining.

Diversification Opportunities for Wizz Air and Beowulf Mining

-0.34

Correlation Coefficient

Wizz Air  Beowulf Mining

Very good diversification

The 3 months correlation between Wizz and Beowulf is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Wizz Air Holdings and Beowulf Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beowulf Mining 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 Beowulf Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beowulf Mining has no effect on the direction of Wizz Air i.e., Wizz Air and Beowulf Mining go up and down completely randomly.

Pair Corralation between Wizz Air and Beowulf Mining

Assuming the 90 days trading horizon Wizz Air Holdings is expected to under-perform the Beowulf Mining. In addition to that, Wizz Air is 4.58 times more volatile than Beowulf Mining. It trades about -0.07 of its total potential returns per unit of risk. Beowulf Mining is currently generating about -0.31 per unit of volatility. If you would invest  2,000  in Beowulf Mining on September 1, 2024 and sell it today you would lose (100.00) from holding Beowulf Mining or give up 5.0% of portfolio value over 90 days.

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

Wizz Air Holdings  vs.  Beowulf Mining

Wizz Air Holdings

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Wizz Air Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Wizz Air is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Beowulf Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Beowulf Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Wizz Air and Beowulf Mining

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

The idea behind Wizz Air Holdings and Beowulf Mining 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.