Correlation Between Widepoint and FiscalNote Holdings

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

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

Diversification Opportunities for Widepoint and FiscalNote Holdings

-0.28

Correlation Coefficient

Widepoint  FiscalNote Holdings

Very good diversification

The 3 months correlation between Widepoint and FiscalNote is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Widepoint C and FiscalNote Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FiscalNote Holdings and Widepoint 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 Widepoint C are associated (or correlated) with FiscalNote Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FiscalNote Holdings has no effect on the direction of Widepoint i.e., Widepoint and FiscalNote Holdings go up and down completely randomly.

Pair Corralation between Widepoint and FiscalNote Holdings

Considering the 90-day investment horizon Widepoint C is expected to under-perform the FiscalNote Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Widepoint C is 1.48 times less risky than FiscalNote Holdings. The stock trades about -0.02 of its potential returns per unit of risk. The FiscalNote Holdings is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  120.00  in FiscalNote Holdings on October 23, 2024 and sell it today you would earn a total of  17.00  from holding FiscalNote Holdings or generate 14.17% return on investment over 90 days.

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

Widepoint C  vs.  FiscalNote Holdings

Widepoint C

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Widepoint C are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Widepoint showed solid returns over the last few months and may actually be approaching a breakup point.

FiscalNote Holdings

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in FiscalNote Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, FiscalNote Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Widepoint and FiscalNote Holdings

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

The idea behind Widepoint C and FiscalNote Holdings 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.