Correlation Between Wrap Technologies and Energous

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

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

Diversification Opportunities for Wrap Technologies and Energous

0.13

Correlation Coefficient

Wrap Technologies  Energous

Average diversification

The 3 months correlation between Wrap and Energous is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Wrap Technologies and Energous in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energous and Wrap Technologies 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 Wrap Technologies are associated (or correlated) with Energous. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energous has no effect on the direction of Wrap Technologies i.e., Wrap Technologies and Energous go up and down completely randomly.

Pair Corralation between Wrap Technologies and Energous

Given the investment horizon of 90 days Wrap Technologies is expected to generate 13.46 times less return on investment than Energous. But when comparing it to its historical volatility, Wrap Technologies is 13.47 times less risky than Energous. It trades about 0.1 of its potential returns per unit of risk. Energous is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  29.00  in Energous on December 20, 2024 and sell it today you would earn a total of  4.00  from holding Energous or generate 13.79% return on investment over 90 days.

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

Wrap Technologies  vs.  Energous

Wrap Technologies

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Wrap Technologies are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Wrap Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

Energous

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Energous are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Energous unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wrap Technologies and Energous

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

The idea behind Wrap Technologies and Energous 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 Transaction History module to view history of all your transactions and understand their impact on performance.