Correlation Between Via Renewables and Wingstop
Can any of the company-specific risk be diversified away by investing in both Via Renewables and Wingstop 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 Via Renewables and Wingstop into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Via Renewables and Wingstop, you can compare the effects of market volatilities on Via Renewables and Wingstop 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 Via Renewables with a short position of Wingstop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Via Renewables and Wingstop.
Diversification Opportunities for Via Renewables and Wingstop
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Via and Wingstop is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Via Renewables and Wingstop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wingstop and Via Renewables 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 Via Renewables are associated (or correlated) with Wingstop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wingstop has no effect on the direction of Via Renewables i.e., Via Renewables and Wingstop go up and down completely randomly.
Pair Corralation between Via Renewables and Wingstop
Assuming the 90 days horizon Via Renewables is expected to generate 0.35 times more return on investment than Wingstop. However, Via Renewables is 2.88 times less risky than Wingstop. It trades about 0.08 of its potential returns per unit of risk. Wingstop is currently generating about -0.04 per unit of risk. If you would invest 2,084 in Via Renewables on September 2, 2024 and sell it today you would earn a total of 127.00 from holding Via Renewables or generate 6.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Via Renewables vs. Wingstop
Performance |
| Timeline |
| Via Renewables |
| Wingstop |
Via Renewables and Wingstop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Via Renewables and Wingstop
The main advantage of trading using opposite Via Renewables and Wingstop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Via Renewables position performs unexpectedly, Wingstop 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 Wingstop will offset losses from the drop in Wingstop's long position.| Via Renewables vs. CMS Energy | Via Renewables vs. ACRES Commercial Realty | Via Renewables vs. Atlanticus Holdings Corp |
| Wingstop vs. Papa Johns International | Wingstop vs. Chipotle Mexican Grill | Wingstop vs. The Wendys Co | Wingstop vs. Dominos Pizza |
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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