Correlation Between Donnelley Financial and Wisekey International
Can any of the company-specific risk be diversified away by investing in both Donnelley Financial and Wisekey 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 Donnelley Financial and Wisekey International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Donnelley Financial Solutions and Wisekey International Holding, you can compare the effects of market volatilities on Donnelley Financial and Wisekey 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 Donnelley Financial with a short position of Wisekey International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Donnelley Financial and Wisekey International.
Diversification Opportunities for Donnelley Financial and Wisekey International
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Donnelley and Wisekey is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Donnelley Financial Solutions and Wisekey International Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wisekey International and Donnelley Financial 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 Donnelley Financial Solutions are associated (or correlated) with Wisekey International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wisekey International has no effect on the direction of Donnelley Financial i.e., Donnelley Financial and Wisekey International go up and down completely randomly.
Pair Corralation between Donnelley Financial and Wisekey International
Given the investment horizon of 90 days Donnelley Financial Solutions is expected to under-perform the Wisekey International. But the stock apears to be less risky and, when comparing its historical volatility, Donnelley Financial Solutions is 2.23 times less risky than Wisekey International. The stock trades about -0.06 of its potential returns per unit of risk. The Wisekey International Holding is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 219.00 in Wisekey International Holding on August 29, 2024 and sell it today you would lose (8.00) from holding Wisekey International Holding or give up 3.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Donnelley Financial Solutions vs. Wisekey International Holding
Performance |
| Timeline |
| Donnelley Financial |
| Wisekey International |
Donnelley Financial and Wisekey International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Donnelley Financial and Wisekey International
The main advantage of trading using opposite Donnelley Financial and Wisekey International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Donnelley Financial position performs unexpectedly, Wisekey 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 Wisekey International will offset losses from the drop in Wisekey International's long position.| Donnelley Financial vs. Scully Royalty | Donnelley Financial vs. Mercurity Fintech Holding | Donnelley Financial vs. Heritage Global | Donnelley Financial vs. Oppenheimer Holdings |
| Wisekey International vs. SemiLEDS | Wisekey International vs. GSI Technology | Wisekey International vs. SEALSQ Corp | Wisekey International vs. WiSA Technologies |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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