Correlation Between Wizz Air and Fair Isaac
Can any of the company-specific risk be diversified away by investing in both Wizz Air and Fair Isaac 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 Fair Isaac 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 Fair Isaac Corp, you can compare the effects of market volatilities on Wizz Air and Fair Isaac 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 Fair Isaac. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wizz Air and Fair Isaac.
Diversification Opportunities for Wizz Air and Fair Isaac
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wizz and Fair is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Wizz Air Holdings and Fair Isaac Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fair Isaac Corp 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 Fair Isaac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fair Isaac Corp has no effect on the direction of Wizz Air i.e., Wizz Air and Fair Isaac go up and down completely randomly.
Pair Corralation between Wizz Air and Fair Isaac
Assuming the 90 days trading horizon Wizz Air is expected to generate 5.85 times less return on investment than Fair Isaac. In addition to that, Wizz Air is 1.8 times more volatile than Fair Isaac Corp. It trades about 0.03 of its total potential returns per unit of risk. Fair Isaac Corp is currently generating about 0.28 per unit of volatility. If you would invest 157,250 in Fair Isaac Corp on August 31, 2024 and sell it today you would earn a total of 66,250 from holding Fair Isaac Corp or generate 42.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wizz Air Holdings vs. Fair Isaac Corp
Performance |
| Timeline |
| Wizz Air Holdings |
| Fair Isaac Corp |
Wizz Air and Fair Isaac Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wizz Air and Fair Isaac
The main advantage of trading using opposite Wizz Air and Fair Isaac positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wizz Air position performs unexpectedly, Fair Isaac 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 Fair Isaac will offset losses from the drop in Fair Isaac's long position.| Wizz Air vs. ADRIATIC METALS LS 013355 | Wizz Air vs. Western Copper and | Wizz Air vs. AIR PRODCHEMICALS | Wizz Air vs. Sixt Leasing SE |
| Fair Isaac vs. Iridium Communications | Fair Isaac vs. AM EAGLE OUTFITTERS | Fair Isaac vs. Cogent Communications Holdings | Fair Isaac vs. GALENA MINING LTD |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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