Correlation Between Western Union and Becle SAB

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

By analyzing existing cross correlation between The Western Union and Becle SAB de, you can compare the effects of market volatilities on Western Union and Becle SAB 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 Western Union with a short position of Becle SAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Union and Becle SAB.

Diversification Opportunities for Western Union and Becle SAB

-0.1

Correlation Coefficient

Western Union  Becle SAB

Good diversification

The 3 months correlation between Western and Becle is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding The Western Union and Becle SAB de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Becle SAB de and Western Union 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 The Western Union are associated (or correlated) with Becle SAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Becle SAB de has no effect on the direction of Western Union i.e., Western Union and Becle SAB go up and down completely randomly.

Pair Corralation between Western Union and Becle SAB

Assuming the 90 days horizon The Western Union is expected to generate 0.34 times more return on investment than Becle SAB. However, The Western Union is 2.97 times less risky than Becle SAB. It trades about 0.13 of its potential returns per unit of risk. Becle SAB de is currently generating about -0.16 per unit of risk. If you would invest  21,854  in The Western Union on December 21, 2024 and sell it today you would earn a total of  1,646  from holding The Western Union or generate 7.53% return on investment over 90 days.

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

The Western Union  vs.  Becle SAB de

Western Union

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Western Union are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak primary indicators, Western Union may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Becle SAB de

Risk-Adjusted Performance

Very Weak

Over the last 90 days Becle SAB de has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Western Union and Becle SAB

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

The idea behind The Western Union and Becle SAB de 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.