Correlation Between Weiss Korea and Bath Body

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Can any of the company-specific risk be diversified away by investing in both Weiss Korea and Bath Body 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 Weiss Korea and Bath Body into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weiss Korea Opportunity and Bath Body Works, you can compare the effects of market volatilities on Weiss Korea and Bath Body 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 Weiss Korea with a short position of Bath Body. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weiss Korea and Bath Body.

Diversification Opportunities for Weiss Korea and Bath Body

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between Weiss Korea and Bath Body

If you would invest  3,714  in Bath Body Works on October 4, 2024 and sell it today you would earn a total of  61.00  from holding Bath Body Works or generate 1.64% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy4.76%
ValuesDaily Returns

Weiss Korea Opportunity  vs.  Bath Body Works

 Performance 
       Timeline  
Weiss Korea Opportunity 

Risk-Adjusted Performance

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Weak
 
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Very Weak
Over the last 90 days Weiss Korea Opportunity has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Weiss Korea is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.
Bath Body Works 

Risk-Adjusted Performance

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Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Bath Body Works are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Bath Body unveiled solid returns over the last few months and may actually be approaching a breakup point.

Weiss Korea and Bath Body Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Weiss Korea and Bath Body

The main advantage of trading using opposite Weiss Korea and Bath Body positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weiss Korea position performs unexpectedly, Bath Body 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 Bath Body will offset losses from the drop in Bath Body's long position.
The idea behind Weiss Korea Opportunity and Bath Body Works 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.

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