Correlation Between Wah Nobel and Big Bird
Can any of the company-specific risk be diversified away by investing in both Wah Nobel and Big Bird 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 Wah Nobel and Big Bird into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wah Nobel Chemicals and Big Bird Foods, you can compare the effects of market volatilities on Wah Nobel and Big Bird 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 Wah Nobel with a short position of Big Bird. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wah Nobel and Big Bird.
Diversification Opportunities for Wah Nobel and Big Bird
Very good diversification
The 3 months correlation between Wah and Big is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Wah Nobel Chemicals and Big Bird Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Big Bird Foods and Wah Nobel 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 Wah Nobel Chemicals are associated (or correlated) with Big Bird. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Big Bird Foods has no effect on the direction of Wah Nobel i.e., Wah Nobel and Big Bird go up and down completely randomly.
Pair Corralation between Wah Nobel and Big Bird
Assuming the 90 days trading horizon Wah Nobel Chemicals is expected to generate 0.38 times more return on investment than Big Bird. However, Wah Nobel Chemicals is 2.61 times less risky than Big Bird. It trades about 0.22 of its potential returns per unit of risk. Big Bird Foods is currently generating about -0.11 per unit of risk. If you would invest 21,121 in Wah Nobel Chemicals on August 30, 2024 and sell it today you would earn a total of 1,318 from holding Wah Nobel Chemicals or generate 6.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wah Nobel Chemicals vs. Big Bird Foods
Performance |
| Timeline |
| Wah Nobel Chemicals |
| Big Bird Foods |
Wah Nobel and Big Bird Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wah Nobel and Big Bird
The main advantage of trading using opposite Wah Nobel and Big Bird positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wah Nobel position performs unexpectedly, Big Bird 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 Big Bird will offset losses from the drop in Big Bird's long position.| Wah Nobel vs. Agritech | Wah Nobel vs. Crescent Star Insurance | Wah Nobel vs. Air Link Communication | Wah Nobel vs. Pakistan Telecommunication |
| Big Bird vs. Century Insurance | Big Bird vs. ITTEFAQ Iron Industries | Big Bird vs. Metropolitan Steel Corp | Big Bird vs. Habib Insurance |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |