Correlation Between Wilmar International and Rumble

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

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

Diversification Opportunities for Wilmar International and Rumble

-0.73

Correlation Coefficient

Wilmar International  Rumble

Pay attention - limited upside

The 3 months correlation between Wilmar and Rumble is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Wilmar International and Rumble Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rumble Inc and Wilmar International 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 Wilmar International are associated (or correlated) with Rumble. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rumble Inc has no effect on the direction of Wilmar International i.e., Wilmar International and Rumble go up and down completely randomly.

Pair Corralation between Wilmar International and Rumble

Assuming the 90 days horizon Wilmar International is expected to under-perform the Rumble. But the pink sheet apears to be less risky and, when comparing its historical volatility, Wilmar International is 3.48 times less risky than Rumble. The pink sheet trades about -0.03 of its potential returns per unit of risk. The Rumble Inc is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,019  in Rumble Inc on September 14, 2024 and sell it today you would lose (205.00) from holding Rumble Inc or give up 20.12% of portfolio value over 90 days.

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

Wilmar International  vs.  Rumble Inc

Wilmar International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wilmar International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward indicators, Wilmar International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Rumble Inc

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Rumble Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Rumble displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wilmar International and Rumble

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

The idea behind Wilmar International and Rumble Inc 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.