Correlation Between Beyond Meat and Western Acquisition

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Can any of the company-specific risk be diversified away by investing in both Beyond Meat and Western Acquisition 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 Beyond Meat and Western Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beyond Meat and Western Acquisition Ventures, you can compare the effects of market volatilities on Beyond Meat and Western Acquisition 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 Beyond Meat with a short position of Western Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beyond Meat and Western Acquisition.

Diversification Opportunities for Beyond Meat and Western Acquisition

-0.12
  Correlation Coefficient

Good diversification

The 3 months correlation between Beyond and Western is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Beyond Meat and Western Acquisition Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Acquisition and Beyond Meat 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 Beyond Meat are associated (or correlated) with Western Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Acquisition has no effect on the direction of Beyond Meat i.e., Beyond Meat and Western Acquisition go up and down completely randomly.

Pair Corralation between Beyond Meat and Western Acquisition

Given the investment horizon of 90 days Beyond Meat is expected to under-perform the Western Acquisition. In addition to that, Beyond Meat is 2.61 times more volatile than Western Acquisition Ventures. It trades about -0.06 of its total potential returns per unit of risk. Western Acquisition Ventures is currently generating about -0.01 per unit of volatility. If you would invest  1,131  in Western Acquisition Ventures on September 1, 2024 and sell it today you would lose (39.00) from holding Western Acquisition Ventures or give up 3.45% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Beyond Meat  vs.  Western Acquisition Ventures

 Performance 
       Timeline  
Beyond Meat 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Beyond Meat has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
Western Acquisition 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Western Acquisition Ventures are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Western Acquisition is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Beyond Meat and Western Acquisition Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Beyond Meat and Western Acquisition

The main advantage of trading using opposite Beyond Meat and Western Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beyond Meat position performs unexpectedly, Western Acquisition 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 Acquisition will offset losses from the drop in Western Acquisition's long position.
The idea behind Beyond Meat and Western Acquisition Ventures pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 CEOs Directory module to screen CEOs from public companies around the world.

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