Correlation Between Wirecard and Adcore

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

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

Diversification Opportunities for Wirecard and Adcore

-0.03

Correlation Coefficient

Wirecard  Adcore

Good diversification

The 3 months correlation between Wirecard and Adcore is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Wirecard AG and Adcore Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adcore Inc and Wirecard 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 Wirecard AG are associated (or correlated) with Adcore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adcore Inc has no effect on the direction of Wirecard i.e., Wirecard and Adcore go up and down completely randomly.

Pair Corralation between Wirecard and Adcore

Assuming the 90 days horizon Wirecard AG is expected to generate 24.83 times more return on investment than Adcore. However, Wirecard is 24.83 times more volatile than Adcore Inc. It trades about 0.11 of its potential returns per unit of risk. Adcore Inc is currently generating about -0.03 per unit of risk. If you would invest  1.00  in Wirecard AG on September 23, 2024 and sell it today you would earn a total of  0.00  from holding Wirecard AG or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.48%
Values	Daily Returns

Wirecard AG  vs.  Adcore Inc

Wirecard AG

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Wirecard AG are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal fundamental indicators, Wirecard reported solid returns over the last few months and may actually be approaching a breakup point.

Adcore Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adcore Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Wirecard and Adcore

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

The idea behind Wirecard AG and Adcore 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.