Correlation Between Western Digital and Cadeler AS
Can any of the company-specific risk be diversified away by investing in both Western Digital and Cadeler AS 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 Cadeler AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Digital and Cadeler AS, you can compare the effects of market volatilities on Western Digital and Cadeler AS 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 Cadeler AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Digital and Cadeler AS.
Diversification Opportunities for Western Digital and Cadeler AS
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and Cadeler is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Western Digital and Cadeler AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cadeler AS 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 Cadeler AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cadeler AS has no effect on the direction of Western Digital i.e., Western Digital and Cadeler AS go up and down completely randomly.
Pair Corralation between Western Digital and Cadeler AS
Considering the 90-day investment horizon Western Digital is expected to generate 1.8 times more return on investment than Cadeler AS. However, Western Digital is 1.8 times more volatile than Cadeler AS. It trades about 0.25 of its potential returns per unit of risk. Cadeler AS is currently generating about -0.17 per unit of risk. If you would invest 6,273 in Western Digital on September 14, 2024 and sell it today you would earn a total of 717.00 from holding Western Digital or generate 11.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Digital vs. Cadeler AS
Performance |
| Timeline |
| Western Digital |
| Cadeler AS |
Western Digital and Cadeler AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Digital and Cadeler AS
The main advantage of trading using opposite Western Digital and Cadeler AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Digital position performs unexpectedly, Cadeler AS 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 Cadeler AS will offset losses from the drop in Cadeler AS's long position.| Western Digital vs. Rigetti Computing | Western Digital vs. D Wave Quantum | Western Digital vs. Desktop Metal | Western Digital vs. Quantum Computing |
| Cadeler AS vs. Inflection Point Acquisition | Cadeler AS vs. Ryanair Holdings PLC | Cadeler AS vs. Hooker Furniture | Cadeler AS vs. Morgan Stanley |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |