Correlation Between CorVel Corp and Wilmar International
Can any of the company-specific risk be diversified away by investing in both CorVel Corp and Wilmar International 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 CorVel Corp and Wilmar International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CorVel Corp and Wilmar International Limited, you can compare the effects of market volatilities on CorVel Corp and Wilmar International 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 CorVel Corp with a short position of Wilmar International. Check out your portfolio center. Please also check ongoing floating volatility patterns of CorVel Corp and Wilmar International.
Diversification Opportunities for CorVel Corp and Wilmar International
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between CorVel and Wilmar is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding CorVel Corp and Wilmar International Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilmar International and CorVel Corp 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 CorVel Corp are associated (or correlated) with Wilmar International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilmar International has no effect on the direction of CorVel Corp i.e., CorVel Corp and Wilmar International go up and down completely randomly.
Pair Corralation between CorVel Corp and Wilmar International
Given the investment horizon of 90 days CorVel Corp is expected to generate 0.46 times more return on investment than Wilmar International. However, CorVel Corp is 2.19 times less risky than Wilmar International. It trades about 0.08 of its potential returns per unit of risk. Wilmar International Limited is currently generating about 0.03 per unit of risk. If you would invest 8,176 in CorVel Corp on November 5, 2024 and sell it today you would earn a total of 3,421 from holding CorVel Corp or generate 41.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 81.71% |
| Values | Daily Returns |
CorVel Corp vs. Wilmar International Limited
Performance |
| Timeline |
| CorVel Corp |
| Wilmar International |
CorVel Corp and Wilmar International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CorVel Corp and Wilmar International
The main advantage of trading using opposite CorVel Corp and Wilmar International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CorVel Corp position performs unexpectedly, Wilmar International 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 Wilmar International will offset losses from the drop in Wilmar International's long position.| CorVel Corp vs. Erie Indemnity | CorVel Corp vs. Huize Holding | CorVel Corp vs. Crawford Company | CorVel Corp vs. eHealth |
| Wilmar International vs. Fresh Del Monte | Wilmar International vs. Limoneira Co | Wilmar International vs. Brasilagro Adr | Wilmar International vs. Alico Inc |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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