Correlation Between Wilhelmina and Steel Connect
Can any of the company-specific risk be diversified away by investing in both Wilhelmina and Steel Connect 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 Wilhelmina and Steel Connect into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wilhelmina and Steel Connect, you can compare the effects of market volatilities on Wilhelmina and Steel Connect 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 Wilhelmina with a short position of Steel Connect. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wilhelmina and Steel Connect.
Diversification Opportunities for Wilhelmina and Steel Connect
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wilhelmina and Steel is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Wilhelmina and Steel Connect in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steel Connect and Wilhelmina 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 Wilhelmina are associated (or correlated) with Steel Connect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steel Connect has no effect on the direction of Wilhelmina i.e., Wilhelmina and Steel Connect go up and down completely randomly.
Pair Corralation between Wilhelmina and Steel Connect
Given the investment horizon of 90 days Wilhelmina is expected to under-perform the Steel Connect. In addition to that, Wilhelmina is 1.29 times more volatile than Steel Connect. It trades about -0.07 of its total potential returns per unit of risk. Steel Connect is currently generating about 0.07 per unit of volatility. If you would invest 1,089 in Steel Connect on September 2, 2024 and sell it today you would earn a total of 157.00 from holding Steel Connect or generate 14.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wilhelmina vs. Steel Connect
Performance |
| Timeline |
| Wilhelmina |
| Steel Connect |
Wilhelmina and Steel Connect Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wilhelmina and Steel Connect
The main advantage of trading using opposite Wilhelmina and Steel Connect positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wilhelmina position performs unexpectedly, Steel Connect 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 Steel Connect will offset losses from the drop in Steel Connect's long position.| Wilhelmina vs. Atos SE | Wilhelmina vs. Deveron Corp | Wilhelmina vs. Appen Limited | Wilhelmina vs. Atos Origin SA |
| Steel Connect vs. Baosheng Media Group | Steel Connect vs. Impact Fusion International | Steel Connect vs. Mirriad Advertising plc | Steel Connect vs. CyberAgent ADR |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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