Correlation Between WPG Holdings and Microbio
Can any of the company-specific risk be diversified away by investing in both WPG Holdings and Microbio 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 WPG Holdings and Microbio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WPG Holdings and Microbio Co, you can compare the effects of market volatilities on WPG Holdings and Microbio 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 WPG Holdings with a short position of Microbio. Check out your portfolio center. Please also check ongoing floating volatility patterns of WPG Holdings and Microbio.
Diversification Opportunities for WPG Holdings and Microbio
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between WPG and Microbio is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding WPG Holdings and Microbio Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microbio and WPG Holdings 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 WPG Holdings are associated (or correlated) with Microbio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microbio has no effect on the direction of WPG Holdings i.e., WPG Holdings and Microbio go up and down completely randomly.
Pair Corralation between WPG Holdings and Microbio
Assuming the 90 days trading horizon WPG Holdings is expected to generate 0.2 times more return on investment than Microbio. However, WPG Holdings is 4.93 times less risky than Microbio. It trades about 0.14 of its potential returns per unit of risk. Microbio Co is currently generating about 0.01 per unit of risk. If you would invest 4,648 in WPG Holdings on September 3, 2024 and sell it today you would earn a total of 492.00 from holding WPG Holdings or generate 10.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WPG Holdings vs. Microbio Co
Performance |
| Timeline |
| WPG Holdings |
| Microbio |
WPG Holdings and Microbio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WPG Holdings and Microbio
The main advantage of trading using opposite WPG Holdings and Microbio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WPG Holdings position performs unexpectedly, Microbio 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 Microbio will offset losses from the drop in Microbio's long position.| WPG Holdings vs. Genovate Biotechnology Co | WPG Holdings vs. Arbor Technology | WPG Holdings vs. STL Technology Co | WPG Holdings vs. Posiflex Technology |
| Microbio vs. Synmosa Biopharma | Microbio vs. Sinphar Pharmaceutical Co | Microbio vs. Taigen Biopharmaceuticals Holdings | Microbio vs. Abnova Taiwan Corp |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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