Correlation Between AKITA Drilling and Western Union
Can any of the company-specific risk be diversified away by investing in both AKITA Drilling and Western Union 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 AKITA Drilling and Western Union into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AKITA Drilling and Western Union Co, you can compare the effects of market volatilities on AKITA Drilling and Western Union 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 AKITA Drilling with a short position of Western Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of AKITA Drilling and Western Union.
Diversification Opportunities for AKITA Drilling and Western Union
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AKITA and Western is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding AKITA Drilling and Western Union Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Union and AKITA Drilling 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 AKITA Drilling are associated (or correlated) with Western Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Union has no effect on the direction of AKITA Drilling i.e., AKITA Drilling and Western Union go up and down completely randomly.
Pair Corralation between AKITA Drilling and Western Union
Assuming the 90 days horizon AKITA Drilling is expected to under-perform the Western Union. In addition to that, AKITA Drilling is 1.23 times more volatile than Western Union Co. It trades about -0.02 of its total potential returns per unit of risk. Western Union Co is currently generating about 0.1 per unit of volatility. If you would invest 1,062 in Western Union Co on September 12, 2024 and sell it today you would earn a total of 25.00 from holding Western Union Co or generate 2.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
AKITA Drilling vs. Western Union Co
Performance |
| Timeline |
| AKITA Drilling |
| Western Union |
AKITA Drilling and Western Union Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AKITA Drilling and Western Union
The main advantage of trading using opposite AKITA Drilling and Western Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AKITA Drilling position performs unexpectedly, Western Union 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 Western Union will offset losses from the drop in Western Union's long position.| AKITA Drilling vs. POSCO Holdings | AKITA Drilling vs. Schweizerische Nationalbank | AKITA Drilling vs. Berkshire Hathaway | AKITA Drilling vs. Berkshire Hathaway |
| Western Union vs. American Express | Western Union vs. Capital One Financial | Western Union vs. Upstart Holdings | Western Union vs. Ally Financial |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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