Correlation Between Wex and New Relic
Can any of the company-specific risk be diversified away by investing in both Wex and New Relic 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 Wex and New Relic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wex Inc and New Relic, you can compare the effects of market volatilities on Wex and New Relic 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 Wex with a short position of New Relic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wex and New Relic.
Diversification Opportunities for Wex and New Relic
Very weak diversification
The 3 months correlation between Wex and New is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Wex Inc and New Relic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Relic and Wex 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 Wex Inc are associated (or correlated) with New Relic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Relic has no effect on the direction of Wex i.e., Wex and New Relic go up and down completely randomly.
Pair Corralation between Wex and New Relic
If you would invest 18,103 in Wex Inc on August 29, 2024 and sell it today you would earn a total of 491.00 from holding Wex Inc or generate 2.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.4% |
| Values | Daily Returns |
Wex Inc vs. New Relic
Performance |
| Timeline |
| Wex Inc |
| New Relic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Wex and New Relic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wex and New Relic
The main advantage of trading using opposite Wex and New Relic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wex position performs unexpectedly, New Relic 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 New Relic will offset losses from the drop in New Relic's long position.| Wex vs. CSG Systems International | Wex vs. VeriSign | Wex vs. Consensus Cloud Solutions | Wex vs. Global Blue Group |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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