Correlation Between Wam Capital and SEVEN GROUP
Can any of the company-specific risk be diversified away by investing in both Wam Capital and SEVEN GROUP 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 SEVEN GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wam Capital and SEVEN GROUP HOLDINGS, you can compare the effects of market volatilities on Wam Capital and SEVEN GROUP 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 SEVEN GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wam Capital and SEVEN GROUP.
Diversification Opportunities for Wam Capital and SEVEN GROUP
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wam and SEVEN is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Wam Capital and SEVEN GROUP HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEVEN GROUP HOLDINGS 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 SEVEN GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEVEN GROUP HOLDINGS has no effect on the direction of Wam Capital i.e., Wam Capital and SEVEN GROUP go up and down completely randomly.
Pair Corralation between Wam Capital and SEVEN GROUP
Assuming the 90 days trading horizon Wam Capital is expected to generate 0.56 times more return on investment than SEVEN GROUP. However, Wam Capital is 1.78 times less risky than SEVEN GROUP. It trades about 0.06 of its potential returns per unit of risk. SEVEN GROUP HOLDINGS is currently generating about -0.31 per unit of risk. If you would invest 158.00 in Wam Capital on November 8, 2024 and sell it today you would earn a total of 1.00 from holding Wam Capital or generate 0.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 47.62% |
| Values | Daily Returns |
Wam Capital vs. SEVEN GROUP HOLDINGS
Performance |
| Timeline |
| Wam Capital |
| SEVEN GROUP HOLDINGS |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Wam Capital and SEVEN GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wam Capital and SEVEN GROUP
The main advantage of trading using opposite Wam Capital and SEVEN GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wam Capital position performs unexpectedly, SEVEN GROUP 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 SEVEN GROUP will offset losses from the drop in SEVEN GROUP's long position.| Wam Capital vs. Oneview Healthcare PLC | Wam Capital vs. Apiam Animal Health | Wam Capital vs. Tombador Iron | Wam Capital vs. Bisalloy Steel Group |
| SEVEN GROUP vs. Red Hill Iron | SEVEN GROUP vs. Tombador Iron | SEVEN GROUP vs. Phoslock Environmental Technologies | SEVEN GROUP vs. Centaurus Metals |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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