Correlation Between WIMFARM SA and Textron
Can any of the company-specific risk be diversified away by investing in both WIMFARM SA and Textron 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 Textron 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 Textron, you can compare the effects of market volatilities on WIMFARM SA and Textron 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 Textron. Check out your portfolio center. Please also check ongoing floating volatility patterns of WIMFARM SA and Textron.
Diversification Opportunities for WIMFARM SA and Textron
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between WIMFARM and Textron is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding WIMFARM SA EO and Textron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Textron 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 Textron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Textron has no effect on the direction of WIMFARM SA i.e., WIMFARM SA and Textron go up and down completely randomly.
Pair Corralation between WIMFARM SA and Textron
Assuming the 90 days horizon WIMFARM SA EO is expected to generate 3.28 times more return on investment than Textron. However, WIMFARM SA is 3.28 times more volatile than Textron. It trades about 0.07 of its potential returns per unit of risk. Textron is currently generating about 0.16 per unit of risk. If you would invest 363.00 in WIMFARM SA EO on October 25, 2024 and sell it today you would earn a total of 14.00 from holding WIMFARM SA EO or generate 3.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
WIMFARM SA EO vs. Textron
Performance |
| Timeline |
| WIMFARM SA EO |
| Textron |
WIMFARM SA and Textron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WIMFARM SA and Textron
The main advantage of trading using opposite WIMFARM SA and Textron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WIMFARM SA position performs unexpectedly, Textron 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 Textron will offset losses from the drop in Textron's long position.| WIMFARM SA vs. MAANSHAN IRON H | WIMFARM SA vs. ANGANG STEEL H | WIMFARM SA vs. Townsquare Media | WIMFARM SA vs. Fuji Media Holdings |
| Textron vs. Boyd Gaming | Textron vs. Air Transport Services | Textron vs. Media and Games | Textron vs. COLUMBIA SPORTSWEAR |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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