Correlation Between WIMFARM SA and GEAR4MUSIC
Can any of the company-specific risk be diversified away by investing in both WIMFARM SA and GEAR4MUSIC 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 WIMFARM SA and GEAR4MUSIC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WIMFARM SA EO and GEAR4MUSIC LS 10, you can compare the effects of market volatilities on WIMFARM SA and GEAR4MUSIC 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 WIMFARM SA with a short position of GEAR4MUSIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of WIMFARM SA and GEAR4MUSIC.
Diversification Opportunities for WIMFARM SA and GEAR4MUSIC
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between WIMFARM and GEAR4MUSIC is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding WIMFARM SA EO and GEAR4MUSIC LS 10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEAR4MUSIC LS 10 and WIMFARM SA 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 WIMFARM SA EO are associated (or correlated) with GEAR4MUSIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEAR4MUSIC LS 10 has no effect on the direction of WIMFARM SA i.e., WIMFARM SA and GEAR4MUSIC go up and down completely randomly.
Pair Corralation between WIMFARM SA and GEAR4MUSIC
Assuming the 90 days horizon WIMFARM SA EO is expected to under-perform the GEAR4MUSIC. In addition to that, WIMFARM SA is 1.04 times more volatile than GEAR4MUSIC LS 10. It trades about -0.07 of its total potential returns per unit of risk. GEAR4MUSIC LS 10 is currently generating about 0.04 per unit of volatility. If you would invest 135.00 in GEAR4MUSIC LS 10 on September 3, 2024 and sell it today you would earn a total of 60.00 from holding GEAR4MUSIC LS 10 or generate 44.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WIMFARM SA EO vs. GEAR4MUSIC LS 10
Performance |
| Timeline |
| WIMFARM SA EO |
| GEAR4MUSIC LS 10 |
WIMFARM SA and GEAR4MUSIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WIMFARM SA and GEAR4MUSIC
The main advantage of trading using opposite WIMFARM SA and GEAR4MUSIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WIMFARM SA position performs unexpectedly, GEAR4MUSIC 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 GEAR4MUSIC will offset losses from the drop in GEAR4MUSIC's long position.| WIMFARM SA vs. SALESFORCE INC CDR | WIMFARM SA vs. EHEALTH | WIMFARM SA vs. YATRA ONLINE DL 0001 | WIMFARM SA vs. SWISS WATER DECAFFCOFFEE |
| GEAR4MUSIC vs. Amazon Inc | GEAR4MUSIC vs. Alibaba Group Holdings | GEAR4MUSIC vs. JD Inc | GEAR4MUSIC vs. Superior Plus 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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