Correlation Between WICKES GROUP and TAIGA BUILDING
Can any of the company-specific risk be diversified away by investing in both WICKES GROUP and TAIGA BUILDING 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 WICKES GROUP and TAIGA BUILDING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WICKES GROUP PLC and TAIGA BUILDING PRODS, you can compare the effects of market volatilities on WICKES GROUP and TAIGA BUILDING 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 WICKES GROUP with a short position of TAIGA BUILDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of WICKES GROUP and TAIGA BUILDING.
Diversification Opportunities for WICKES GROUP and TAIGA BUILDING
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WICKES and TAIGA is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding WICKES GROUP PLC and TAIGA BUILDING PRODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAIGA BUILDING PRODS and WICKES GROUP 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 WICKES GROUP PLC are associated (or correlated) with TAIGA BUILDING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAIGA BUILDING PRODS has no effect on the direction of WICKES GROUP i.e., WICKES GROUP and TAIGA BUILDING go up and down completely randomly.
Pair Corralation between WICKES GROUP and TAIGA BUILDING
Assuming the 90 days horizon WICKES GROUP PLC is expected to under-perform the TAIGA BUILDING. But the stock apears to be less risky and, when comparing its historical volatility, WICKES GROUP PLC is 1.11 times less risky than TAIGA BUILDING. The stock trades about -0.06 of its potential returns per unit of risk. The TAIGA BUILDING PRODS is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 248.00 in TAIGA BUILDING PRODS on September 13, 2024 and sell it today you would earn a total of 0.00 from holding TAIGA BUILDING PRODS or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WICKES GROUP PLC vs. TAIGA BUILDING PRODS
Performance |
| Timeline |
| WICKES GROUP PLC |
| TAIGA BUILDING PRODS |
WICKES GROUP and TAIGA BUILDING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WICKES GROUP and TAIGA BUILDING
The main advantage of trading using opposite WICKES GROUP and TAIGA BUILDING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WICKES GROUP position performs unexpectedly, TAIGA BUILDING 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 TAIGA BUILDING will offset losses from the drop in TAIGA BUILDING's long position.| WICKES GROUP vs. The Yokohama Rubber | WICKES GROUP vs. Rayonier Advanced Materials | WICKES GROUP vs. National Storage Affiliates | WICKES GROUP vs. TELES Informationstechnologien AG |
| TAIGA BUILDING vs. The Home Depot | TAIGA BUILDING vs. The Home Depot | TAIGA BUILDING vs. Floor Decor Holdings | TAIGA BUILDING vs. LESLIES INC DL |
Check out your portfolio center.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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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