Correlation Between First State and WB Burgers
Can any of the company-specific risk be diversified away by investing in both First State and WB Burgers 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 First State and WB Burgers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First State Financial and WB Burgers Asia, you can compare the effects of market volatilities on First State and WB Burgers 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 First State with a short position of WB Burgers. Check out your portfolio center. Please also check ongoing floating volatility patterns of First State and WB Burgers.
Diversification Opportunities for First State and WB Burgers
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and WBBA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First State Financial and WB Burgers Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WB Burgers Asia and First State 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 First State Financial are associated (or correlated) with WB Burgers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WB Burgers Asia has no effect on the direction of First State i.e., First State and WB Burgers go up and down completely randomly.
Pair Corralation between First State and WB Burgers
Given the investment horizon of 90 days First State is expected to generate 8.23 times less return on investment than WB Burgers. But when comparing it to its historical volatility, First State Financial is 6.67 times less risky than WB Burgers. It trades about 0.1 of its potential returns per unit of risk. WB Burgers Asia is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 250.00 in WB Burgers Asia on November 2, 2024 and sell it today you would lose (210.00) from holding WB Burgers Asia or give up 84.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 33.74% |
| Values | Daily Returns |
First State Financial vs. WB Burgers Asia
Performance |
| Timeline |
| First State Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| WB Burgers Asia |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First State and WB Burgers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First State and WB Burgers
The main advantage of trading using opposite First State and WB Burgers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First State position performs unexpectedly, WB Burgers 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 WB Burgers will offset losses from the drop in WB Burgers' long position.| First State vs. First Interstate BancSystem | First State vs. First Financial Bankshares | First State vs. CVB Financial | First State vs. Eagle Bancorp Montana |
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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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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