Correlation Between Plaza Centers and Wesure Global
Can any of the company-specific risk be diversified away by investing in both Plaza Centers and Wesure Global 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 Plaza Centers and Wesure Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plaza Centers NV and Wesure Global Tech, you can compare the effects of market volatilities on Plaza Centers and Wesure Global 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 Plaza Centers with a short position of Wesure Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plaza Centers and Wesure Global.
Diversification Opportunities for Plaza Centers and Wesure Global
-0.93 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Plaza and Wesure is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Plaza Centers NV and Wesure Global Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wesure Global Tech and Plaza Centers 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 Plaza Centers NV are associated (or correlated) with Wesure Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wesure Global Tech has no effect on the direction of Plaza Centers i.e., Plaza Centers and Wesure Global go up and down completely randomly.
Pair Corralation between Plaza Centers and Wesure Global
Assuming the 90 days trading horizon Plaza Centers is expected to generate 27.25 times less return on investment than Wesure Global. But when comparing it to its historical volatility, Plaza Centers NV is 8.68 times less risky than Wesure Global. It trades about 0.2 of its potential returns per unit of risk. Wesure Global Tech is currently generating about 0.64 of returns per unit of risk over similar time horizon. If you would invest 36,000 in Wesure Global Tech on August 29, 2024 and sell it today you would earn a total of 12,220 from holding Wesure Global Tech or generate 33.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plaza Centers NV vs. Wesure Global Tech
Performance |
| Timeline |
| Plaza Centers NV |
| Wesure Global Tech |
Plaza Centers and Wesure Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plaza Centers and Wesure Global
The main advantage of trading using opposite Plaza Centers and Wesure Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plaza Centers position performs unexpectedly, Wesure Global 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 Wesure Global will offset losses from the drop in Wesure Global's long position.| Plaza Centers vs. Ybox Real Estate | Plaza Centers vs. Brainsway | Plaza Centers vs. Mivne Real Estate | Plaza Centers vs. Photomyne |
| Wesure Global vs. Brainsway | Wesure Global vs. Mivne Real Estate | Wesure Global vs. Photomyne | Wesure Global vs. Bezeq Israeli Telecommunication |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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