Correlation Between Bowhead Specialty and WELLS
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By analyzing existing cross correlation between Bowhead Specialty Holdings and WELLS FARGO NEW, you can compare the effects of market volatilities on Bowhead Specialty and WELLS 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 Bowhead Specialty with a short position of WELLS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bowhead Specialty and WELLS.
Diversification Opportunities for Bowhead Specialty and WELLS
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bowhead and WELLS is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Bowhead Specialty Holdings and WELLS FARGO NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WELLS FARGO NEW and Bowhead Specialty 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 Bowhead Specialty Holdings are associated (or correlated) with WELLS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WELLS FARGO NEW has no effect on the direction of Bowhead Specialty i.e., Bowhead Specialty and WELLS go up and down completely randomly.
Pair Corralation between Bowhead Specialty and WELLS
Considering the 90-day investment horizon Bowhead Specialty Holdings is expected to generate 1.4 times more return on investment than WELLS. However, Bowhead Specialty is 1.4 times more volatile than WELLS FARGO NEW. It trades about 0.22 of its potential returns per unit of risk. WELLS FARGO NEW is currently generating about 0.19 per unit of risk. If you would invest 3,183 in Bowhead Specialty Holdings on November 9, 2024 and sell it today you would earn a total of 196.00 from holding Bowhead Specialty Holdings or generate 6.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Bowhead Specialty Holdings vs. WELLS FARGO NEW
Performance |
| Timeline |
| Bowhead Specialty |
| WELLS FARGO NEW |
Bowhead Specialty and WELLS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bowhead Specialty and WELLS
The main advantage of trading using opposite Bowhead Specialty and WELLS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bowhead Specialty position performs unexpectedly, WELLS 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 WELLS will offset losses from the drop in WELLS's long position.| Bowhead Specialty vs. East Africa Metals | Bowhead Specialty vs. The Cheesecake Factory | Bowhead Specialty vs. El Pollo Loco | Bowhead Specialty vs. Summit Materials |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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