Correlation Between Waters and 60 Degrees
Can any of the company-specific risk be diversified away by investing in both Waters and 60 Degrees 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 Waters and 60 Degrees into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Waters and 60 Degrees Pharmaceuticals,, you can compare the effects of market volatilities on Waters and 60 Degrees 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 Waters with a short position of 60 Degrees. Check out your portfolio center. Please also check ongoing floating volatility patterns of Waters and 60 Degrees.
Diversification Opportunities for Waters and 60 Degrees
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Waters and SXTPW is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Waters and 60 Degrees Pharmaceuticals, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 60 Degrees Pharmaceu and Waters 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 Waters are associated (or correlated) with 60 Degrees. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 60 Degrees Pharmaceu has no effect on the direction of Waters i.e., Waters and 60 Degrees go up and down completely randomly.
Pair Corralation between Waters and 60 Degrees
Considering the 90-day investment horizon Waters is expected to under-perform the 60 Degrees. But the stock apears to be less risky and, when comparing its historical volatility, Waters is 34.41 times less risky than 60 Degrees. The stock trades about -0.01 of its potential returns per unit of risk. The 60 Degrees Pharmaceuticals, is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1.52 in 60 Degrees Pharmaceuticals, on September 3, 2024 and sell it today you would lose (0.04) from holding 60 Degrees Pharmaceuticals, or give up 2.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 75.0% |
| Values | Daily Returns |
Waters vs. 60 Degrees Pharmaceuticals,
Performance |
| Timeline |
| Waters |
| 60 Degrees Pharmaceu |
Waters and 60 Degrees Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Waters and 60 Degrees
The main advantage of trading using opposite Waters and 60 Degrees positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Waters position performs unexpectedly, 60 Degrees 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 60 Degrees will offset losses from the drop in 60 Degrees' long position.The idea behind Waters and 60 Degrees Pharmaceuticals, 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.| 60 Degrees vs. Hafnia Limited | 60 Degrees vs. Bright Scholar Education | 60 Degrees vs. Senmiao Technology | 60 Degrees vs. Radcom |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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