Correlation Between WEBUY GLOBAL and Allison Transmission
Can any of the company-specific risk be diversified away by investing in both WEBUY GLOBAL and Allison Transmission 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 WEBUY GLOBAL and Allison Transmission into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WEBUY GLOBAL LTD and Allison Transmission Holdings, you can compare the effects of market volatilities on WEBUY GLOBAL and Allison Transmission 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 WEBUY GLOBAL with a short position of Allison Transmission. Check out your portfolio center. Please also check ongoing floating volatility patterns of WEBUY GLOBAL and Allison Transmission.
Diversification Opportunities for WEBUY GLOBAL and Allison Transmission
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WEBUY and Allison is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding WEBUY GLOBAL LTD and Allison Transmission Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allison Transmission and WEBUY GLOBAL 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 WEBUY GLOBAL LTD are associated (or correlated) with Allison Transmission. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allison Transmission has no effect on the direction of WEBUY GLOBAL i.e., WEBUY GLOBAL and Allison Transmission go up and down completely randomly.
Pair Corralation between WEBUY GLOBAL and Allison Transmission
Given the investment horizon of 90 days WEBUY GLOBAL LTD is expected to generate 7.27 times more return on investment than Allison Transmission. However, WEBUY GLOBAL is 7.27 times more volatile than Allison Transmission Holdings. It trades about 0.04 of its potential returns per unit of risk. Allison Transmission Holdings is currently generating about 0.23 per unit of risk. If you would invest 20.00 in WEBUY GLOBAL LTD on August 30, 2024 and sell it today you would lose (2.00) from holding WEBUY GLOBAL LTD or give up 10.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WEBUY GLOBAL LTD vs. Allison Transmission Holdings
Performance |
| Timeline |
| WEBUY GLOBAL LTD |
| Allison Transmission |
WEBUY GLOBAL and Allison Transmission Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WEBUY GLOBAL and Allison Transmission
The main advantage of trading using opposite WEBUY GLOBAL and Allison Transmission positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WEBUY GLOBAL position performs unexpectedly, Allison Transmission 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 Allison Transmission will offset losses from the drop in Allison Transmission's long position.| WEBUY GLOBAL vs. MOGU Inc | WEBUY GLOBAL vs. iPower Inc | WEBUY GLOBAL vs. Jeffs Brands | WEBUY GLOBAL vs. Kidpik Corp |
| Allison Transmission vs. Gentex | Allison Transmission vs. Adient PLC | Allison Transmission vs. Autoliv | Allison Transmission vs. Fox Factory Holding |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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