Correlation Between Confluent and WixCom
Can any of the company-specific risk be diversified away by investing in both Confluent and WixCom 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 Confluent and WixCom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Confluent and WixCom, you can compare the effects of market volatilities on Confluent and WixCom 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 Confluent with a short position of WixCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Confluent and WixCom.
Diversification Opportunities for Confluent and WixCom
Very good diversification
The 3 months correlation between Confluent and WixCom is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Confluent and WixCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WixCom and Confluent 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 Confluent are associated (or correlated) with WixCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WixCom has no effect on the direction of Confluent i.e., Confluent and WixCom go up and down completely randomly.
Pair Corralation between Confluent and WixCom
Given the investment horizon of 90 days Confluent is expected to generate 2.65 times more return on investment than WixCom. However, Confluent is 2.65 times more volatile than WixCom. It trades about 0.1 of its potential returns per unit of risk. WixCom is currently generating about -0.37 per unit of risk. If you would invest 2,896 in Confluent on December 4, 2024 and sell it today you would earn a total of 278.00 from holding Confluent or generate 9.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Confluent vs. WixCom
Performance |
| Timeline |
| Confluent |
| WixCom |
Confluent and WixCom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Confluent and WixCom
The main advantage of trading using opposite Confluent and WixCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Confluent position performs unexpectedly, WixCom 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 WixCom will offset losses from the drop in WixCom's long position.| Confluent vs. DigitalOcean Holdings | Confluent vs. Doximity | Confluent vs. Gitlab Inc | Confluent vs. Global E Online |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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