Correlation Between Pegasystems and Wex
Can any of the company-specific risk be diversified away by investing in both Pegasystems and Wex 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 Pegasystems and Wex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pegasystems and Wex Inc, you can compare the effects of market volatilities on Pegasystems and Wex 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 Pegasystems with a short position of Wex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pegasystems and Wex.
Diversification Opportunities for Pegasystems and Wex
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pegasystems and Wex is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Pegasystems and Wex Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wex Inc and Pegasystems 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 Pegasystems are associated (or correlated) with Wex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wex Inc has no effect on the direction of Pegasystems i.e., Pegasystems and Wex go up and down completely randomly.
Pair Corralation between Pegasystems and Wex
Given the investment horizon of 90 days Pegasystems is expected to generate 1.79 times more return on investment than Wex. However, Pegasystems is 1.79 times more volatile than Wex Inc. It trades about 0.1 of its potential returns per unit of risk. Wex Inc is currently generating about 0.0 per unit of risk. If you would invest 4,879 in Pegasystems on August 25, 2024 and sell it today you would earn a total of 4,273 from holding Pegasystems or generate 87.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pegasystems vs. Wex Inc
Performance |
| Timeline |
| Pegasystems |
| Wex Inc |
Pegasystems and Wex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pegasystems and Wex
The main advantage of trading using opposite Pegasystems and Wex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pegasystems position performs unexpectedly, Wex 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 Wex will offset losses from the drop in Wex's long position.| Pegasystems vs. Wex Inc | Pegasystems vs. Cognex | Pegasystems vs. Progress Software | Pegasystems vs. Fair Isaac |
| Wex vs. Oneconnect Financial Technology | Wex vs. Global Business Travel | Wex vs. Alight Inc | Wex vs. CS Disco LLC |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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