Correlation Between Casing Macron and WPG Holdings
Can any of the company-specific risk be diversified away by investing in both Casing Macron and WPG 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 Casing Macron and WPG Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Casing Macron Technology and WPG Holdings, you can compare the effects of market volatilities on Casing Macron and WPG 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 Casing Macron with a short position of WPG Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Casing Macron and WPG Holdings.
Diversification Opportunities for Casing Macron and WPG Holdings
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Casing and WPG is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Casing Macron Technology and WPG Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WPG Holdings and Casing Macron 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 Casing Macron Technology are associated (or correlated) with WPG Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WPG Holdings has no effect on the direction of Casing Macron i.e., Casing Macron and WPG Holdings go up and down completely randomly.
Pair Corralation between Casing Macron and WPG Holdings
Assuming the 90 days trading horizon Casing Macron Technology is expected to under-perform the WPG Holdings. In addition to that, Casing Macron is 15.61 times more volatile than WPG Holdings. It trades about 0.0 of its total potential returns per unit of risk. WPG Holdings is currently generating about 0.22 per unit of volatility. If you would invest 5,050 in WPG Holdings on August 30, 2024 and sell it today you would earn a total of 90.00 from holding WPG Holdings or generate 1.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Casing Macron Technology vs. WPG Holdings
Performance |
| Timeline |
| Casing Macron Technology |
| WPG Holdings |
Casing Macron and WPG Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Casing Macron and WPG Holdings
The main advantage of trading using opposite Casing Macron and WPG Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Casing Macron position performs unexpectedly, WPG 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 WPG Holdings will offset losses from the drop in WPG Holdings' long position.| Casing Macron vs. Xander International | Casing Macron vs. MetaTech AP | Casing Macron vs. Niching Industrial | Casing Macron vs. Sentronic International |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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