Correlation Between WGRO and Frontera
Can any of the company-specific risk be diversified away by investing in both WGRO and Frontera 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 WGRO and Frontera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WGRO and Frontera Group, you can compare the effects of market volatilities on WGRO and Frontera 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 WGRO with a short position of Frontera. Check out your portfolio center. Please also check ongoing floating volatility patterns of WGRO and Frontera.
Diversification Opportunities for WGRO and Frontera
Pay attention - limited upside
The 3 months correlation between WGRO and Frontera is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding WGRO and Frontera Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frontera Group and WGRO 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 WGRO are associated (or correlated) with Frontera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frontera Group has no effect on the direction of WGRO i.e., WGRO and Frontera go up and down completely randomly.
Pair Corralation between WGRO and Frontera
Given the investment horizon of 90 days WGRO is expected to generate 1.21 times less return on investment than Frontera. But when comparing it to its historical volatility, WGRO is 18.8 times less risky than Frontera. It trades about 0.17 of its potential returns per unit of risk. Frontera Group is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 0.70 in Frontera Group on August 31, 2024 and sell it today you would lose (0.69) from holding Frontera Group or give up 98.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 13.45% |
| Values | Daily Returns |
WGRO vs. Frontera Group
Performance |
| Timeline |
| WGRO |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Frontera Group |
WGRO and Frontera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WGRO and Frontera
The main advantage of trading using opposite WGRO and Frontera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WGRO position performs unexpectedly, Frontera 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 Frontera will offset losses from the drop in Frontera's long position.| WGRO vs. iShares Small Cap | WGRO vs. Virtus ETF Trust | WGRO vs. Amplify Thematic All Stars | WGRO vs. ProShares Nasdaq 100 Dorsey |
| Frontera vs. XCPCNL Business Services | Frontera vs. International Consolidated Companies | Frontera vs. Global Payments | Frontera vs. Mills Music Trust |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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