Correlation Between WESANA HEALTH and Fevertree Drinks
Can any of the company-specific risk be diversified away by investing in both WESANA HEALTH and Fevertree Drinks 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 WESANA HEALTH and Fevertree Drinks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WESANA HEALTH HOLD and Fevertree Drinks PLC, you can compare the effects of market volatilities on WESANA HEALTH and Fevertree Drinks 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 WESANA HEALTH with a short position of Fevertree Drinks. Check out your portfolio center. Please also check ongoing floating volatility patterns of WESANA HEALTH and Fevertree Drinks.
Diversification Opportunities for WESANA HEALTH and Fevertree Drinks
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WESANA and Fevertree is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding WESANA HEALTH HOLD and Fevertree Drinks PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fevertree Drinks PLC and WESANA HEALTH 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 WESANA HEALTH HOLD are associated (or correlated) with Fevertree Drinks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fevertree Drinks PLC has no effect on the direction of WESANA HEALTH i.e., WESANA HEALTH and Fevertree Drinks go up and down completely randomly.
Pair Corralation between WESANA HEALTH and Fevertree Drinks
If you would invest 0.15 in WESANA HEALTH HOLD on October 14, 2024 and sell it today you would earn a total of 0.00 from holding WESANA HEALTH HOLD or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.36% |
| Values | Daily Returns |
WESANA HEALTH HOLD vs. Fevertree Drinks PLC
Performance |
| Timeline |
| WESANA HEALTH HOLD |
| Fevertree Drinks PLC |
WESANA HEALTH and Fevertree Drinks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WESANA HEALTH and Fevertree Drinks
The main advantage of trading using opposite WESANA HEALTH and Fevertree Drinks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WESANA HEALTH position performs unexpectedly, Fevertree Drinks 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 Fevertree Drinks will offset losses from the drop in Fevertree Drinks' long position.| WESANA HEALTH vs. Superior Plus Corp | WESANA HEALTH vs. NMI Holdings | WESANA HEALTH vs. SIVERS SEMICONDUCTORS AB | WESANA HEALTH vs. Talanx AG |
| Fevertree Drinks vs. STRAYER EDUCATION | Fevertree Drinks vs. Wenzhou Kangning Hospital | Fevertree Drinks vs. WESANA HEALTH HOLD | Fevertree Drinks vs. PURETECH HEALTH PLC |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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