Correlation Between Winpak and Financial

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

By analyzing existing cross correlation between Winpak and Financial 15 Split, you can compare the effects of market volatilities on Winpak and Financial 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 Winpak with a short position of Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Winpak and Financial.

Diversification Opportunities for Winpak and Financial

-0.53

Correlation Coefficient

Winpak  Financial

Excellent diversification

The 3 months correlation between Winpak and Financial is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Winpak and Financial 15 Split in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Financial 15 Split and Winpak 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 Winpak are associated (or correlated) with Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Financial 15 Split has no effect on the direction of Winpak i.e., Winpak and Financial go up and down completely randomly.

Pair Corralation between Winpak and Financial

Assuming the 90 days trading horizon Winpak is expected to under-perform the Financial. In addition to that, Winpak is 5.66 times more volatile than Financial 15 Split. It trades about -0.08 of its total potential returns per unit of risk. Financial 15 Split is currently generating about 0.43 per unit of volatility. If you would invest  1,020  in Financial 15 Split on October 26, 2024 and sell it today you would earn a total of  75.00  from holding Financial 15 Split or generate 7.35% return on investment over 90 days.

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

Winpak  vs.  Financial 15 Split

Winpak

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Winpak has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's forward-looking signals remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Financial 15 Split

Risk-Adjusted Performance

33 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Financial 15 Split are ranked lower than 33 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Financial may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Winpak and Financial

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

The idea behind Winpak and Financial 15 Split 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.