Correlation Between Wesure Global and Abra Information
Can any of the company-specific risk be diversified away by investing in both Wesure Global and Abra Information 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 Wesure Global and Abra Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wesure Global Tech and Abra Information Technologies, you can compare the effects of market volatilities on Wesure Global and Abra Information 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 Wesure Global with a short position of Abra Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wesure Global and Abra Information.
Diversification Opportunities for Wesure Global and Abra Information
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wesure and Abra is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Wesure Global Tech and Abra Information Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abra Information Tec and Wesure 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 Wesure Global Tech are associated (or correlated) with Abra Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abra Information Tec has no effect on the direction of Wesure Global i.e., Wesure Global and Abra Information go up and down completely randomly.
Pair Corralation between Wesure Global and Abra Information
Assuming the 90 days trading horizon Wesure Global Tech is expected to generate 1.72 times more return on investment than Abra Information. However, Wesure Global is 1.72 times more volatile than Abra Information Technologies. It trades about 0.07 of its potential returns per unit of risk. Abra Information Technologies is currently generating about -0.04 per unit of risk. If you would invest 21,300 in Wesure Global Tech on August 27, 2024 and sell it today you would earn a total of 22,400 from holding Wesure Global Tech or generate 105.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wesure Global Tech vs. Abra Information Technologies
Performance |
| Timeline |
| Wesure Global Tech |
| Abra Information Tec |
Wesure Global and Abra Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wesure Global and Abra Information
The main advantage of trading using opposite Wesure Global and Abra Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wesure Global position performs unexpectedly, Abra Information 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 Abra Information will offset losses from the drop in Abra Information's long position.| Wesure Global vs. Brainsway | Wesure Global vs. Mivne Real Estate | Wesure Global vs. Photomyne | Wesure Global vs. Bezeq Israeli Telecommunication |
| Abra Information vs. Batm Advanced Communications | Abra Information vs. Rapac Communication Infrastructure | Abra Information vs. Arad Investment Industrial | Abra Information vs. Harel Insurance Investments |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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