Correlation Between Wayside Technology and De Grey
Can any of the company-specific risk be diversified away by investing in both Wayside Technology and De Grey 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 Wayside Technology and De Grey into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wayside Technology Group and De Grey Mining, you can compare the effects of market volatilities on Wayside Technology and De Grey 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 Wayside Technology with a short position of De Grey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wayside Technology and De Grey.
Diversification Opportunities for Wayside Technology and De Grey
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wayside and DGD is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Wayside Technology Group and De Grey Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on De Grey Mining and Wayside Technology 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 Wayside Technology Group are associated (or correlated) with De Grey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of De Grey Mining has no effect on the direction of Wayside Technology i.e., Wayside Technology and De Grey go up and down completely randomly.
Pair Corralation between Wayside Technology and De Grey
Assuming the 90 days horizon Wayside Technology Group is expected to generate 0.88 times more return on investment than De Grey. However, Wayside Technology Group is 1.13 times less risky than De Grey. It trades about 0.19 of its potential returns per unit of risk. De Grey Mining is currently generating about 0.13 per unit of risk. If you would invest 6,229 in Wayside Technology Group on October 25, 2024 and sell it today you would earn a total of 6,671 from holding Wayside Technology Group or generate 107.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wayside Technology Group vs. De Grey Mining
Performance |
| Timeline |
| Wayside Technology |
| De Grey Mining |
Wayside Technology and De Grey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wayside Technology and De Grey
The main advantage of trading using opposite Wayside Technology and De Grey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wayside Technology position performs unexpectedly, De Grey 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 De Grey will offset losses from the drop in De Grey's long position.| Wayside Technology vs. REVO INSURANCE SPA | Wayside Technology vs. CHIBA BANK | Wayside Technology vs. Chiba Bank | Wayside Technology vs. Ameriprise Financial |
| De Grey vs. VIENNA INSURANCE GR | De Grey vs. Japan Post Insurance | De Grey vs. Safety Insurance Group | De Grey vs. UNIQA INSURANCE GR |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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