Correlation Between Wam Capital and Invictus Energy

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Can any of the company-specific risk be diversified away by investing in both Wam Capital and Invictus Energy 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 Wam Capital and Invictus Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wam Capital and Invictus Energy, you can compare the effects of market volatilities on Wam Capital and Invictus Energy 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 Wam Capital with a short position of Invictus Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wam Capital and Invictus Energy.

Diversification Opportunities for Wam Capital and Invictus Energy

WamInvictusDiversified AwayWamInvictusDiversified Away100%
0.26
  Correlation Coefficient

Modest diversification

The 3 months correlation between Wam and Invictus is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Wam Capital and Invictus Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invictus Energy and Wam Capital 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 Wam Capital are associated (or correlated) with Invictus Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invictus Energy has no effect on the direction of Wam Capital i.e., Wam Capital and Invictus Energy go up and down completely randomly.

Pair Corralation between Wam Capital and Invictus Energy

Assuming the 90 days trading horizon Wam Capital is expected to generate 0.31 times more return on investment than Invictus Energy. However, Wam Capital is 3.25 times less risky than Invictus Energy. It trades about 0.31 of its potential returns per unit of risk. Invictus Energy is currently generating about -0.42 per unit of risk. If you would invest  159.00  in Wam Capital on November 18, 2024 and sell it today you would earn a total of  8.00  from holding Wam Capital or generate 5.03% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Wam Capital  vs.  Invictus Energy

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -100102030
JavaScript chart by amCharts 3.21.15WAM IVZ
       Timeline  
Wam Capital 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Wam Capital are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain primary indicators, Wam Capital may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1.51.551.61.65
Invictus Energy 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Invictus Energy are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Invictus Energy may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.0650.070.0750.080.0850.09

Wam Capital and Invictus Energy Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.25-1.67-1.09-0.510.06360.681.291.912.523.14 0.10.20.30.40.50.60.7
JavaScript chart by amCharts 3.21.15WAM IVZ
       Returns  

Pair Trading with Wam Capital and Invictus Energy

The main advantage of trading using opposite Wam Capital and Invictus Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wam Capital position performs unexpectedly, Invictus Energy 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 Invictus Energy will offset losses from the drop in Invictus Energy's long position.
The idea behind Wam Capital and Invictus Energy pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

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