Correlation Between WESTERN DIGITAL and PENINSULA ENERG
Can any of the company-specific risk be diversified away by investing in both WESTERN DIGITAL and PENINSULA ENERG 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 WESTERN DIGITAL and PENINSULA ENERG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WESTERN DIGITAL and PENINSULA ENERG, you can compare the effects of market volatilities on WESTERN DIGITAL and PENINSULA ENERG 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 WESTERN DIGITAL with a short position of PENINSULA ENERG. Check out your portfolio center. Please also check ongoing floating volatility patterns of WESTERN DIGITAL and PENINSULA ENERG.
Diversification Opportunities for WESTERN DIGITAL and PENINSULA ENERG
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WESTERN and PENINSULA is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding WESTERN DIGITAL and PENINSULA ENERG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PENINSULA ENERG and WESTERN DIGITAL 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 WESTERN DIGITAL are associated (or correlated) with PENINSULA ENERG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PENINSULA ENERG has no effect on the direction of WESTERN DIGITAL i.e., WESTERN DIGITAL and PENINSULA ENERG go up and down completely randomly.
Pair Corralation between WESTERN DIGITAL and PENINSULA ENERG
Assuming the 90 days trading horizon WESTERN DIGITAL is expected to under-perform the PENINSULA ENERG. But the stock apears to be less risky and, when comparing its historical volatility, WESTERN DIGITAL is 1.73 times less risky than PENINSULA ENERG. The stock trades about -0.22 of its potential returns per unit of risk. The PENINSULA ENERG is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 72.00 in PENINSULA ENERG on September 25, 2024 and sell it today you would lose (1.00) from holding PENINSULA ENERG or give up 1.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
WESTERN DIGITAL vs. PENINSULA ENERG
Performance |
| Timeline |
| WESTERN DIGITAL |
| PENINSULA ENERG |
WESTERN DIGITAL and PENINSULA ENERG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WESTERN DIGITAL and PENINSULA ENERG
The main advantage of trading using opposite WESTERN DIGITAL and PENINSULA ENERG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WESTERN DIGITAL position performs unexpectedly, PENINSULA ENERG 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 PENINSULA ENERG will offset losses from the drop in PENINSULA ENERG's long position.| WESTERN DIGITAL vs. Apple Inc | WESTERN DIGITAL vs. Apple Inc | WESTERN DIGITAL vs. Microsoft | WESTERN DIGITAL vs. Microsoft |
| PENINSULA ENERG vs. Apple Inc | PENINSULA ENERG vs. Apple Inc | PENINSULA ENERG vs. Microsoft | PENINSULA ENERG vs. Microsoft |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |