Correlation Between Wizz Air and CSL
Can any of the company-specific risk be diversified away by investing in both Wizz Air and CSL 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 Wizz Air and CSL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wizz Air Holdings and CSL LTD SPONADR, you can compare the effects of market volatilities on Wizz Air and CSL 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 Wizz Air with a short position of CSL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wizz Air and CSL.
Diversification Opportunities for Wizz Air and CSL
Excellent diversification
The 3 months correlation between Wizz and CSL is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Wizz Air Holdings and CSL LTD SPONADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSL LTD SPONADR and Wizz Air 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 Wizz Air Holdings are associated (or correlated) with CSL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSL LTD SPONADR has no effect on the direction of Wizz Air i.e., Wizz Air and CSL go up and down completely randomly.
Pair Corralation between Wizz Air and CSL
Assuming the 90 days trading horizon Wizz Air Holdings is expected to under-perform the CSL. In addition to that, Wizz Air is 2.14 times more volatile than CSL LTD SPONADR. It trades about -0.05 of its total potential returns per unit of risk. CSL LTD SPONADR is currently generating about 0.0 per unit of volatility. If you would invest 8,987 in CSL LTD SPONADR on August 29, 2024 and sell it today you would lose (437.00) from holding CSL LTD SPONADR or give up 4.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wizz Air Holdings vs. CSL LTD SPONADR
Performance |
| Timeline |
| Wizz Air Holdings |
| CSL LTD SPONADR |
Wizz Air and CSL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wizz Air and CSL
The main advantage of trading using opposite Wizz Air and CSL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wizz Air position performs unexpectedly, CSL 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 CSL will offset losses from the drop in CSL's long position.| Wizz Air vs. CVR Medical Corp | Wizz Air vs. DXC Technology Co | Wizz Air vs. X FAB Silicon Foundries | Wizz Air vs. Microbot Medical |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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