Correlation Between Wizz Air and IBU-tec Advanced
Can any of the company-specific risk be diversified away by investing in both Wizz Air and IBU-tec Advanced 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 IBU-tec Advanced 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 IBU tec advanced materials, you can compare the effects of market volatilities on Wizz Air and IBU-tec Advanced 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 IBU-tec Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wizz Air and IBU-tec Advanced.
Diversification Opportunities for Wizz Air and IBU-tec Advanced
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wizz and IBU-tec is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Wizz Air Holdings and IBU tec advanced materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IBU tec advanced 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 IBU-tec Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IBU tec advanced has no effect on the direction of Wizz Air i.e., Wizz Air and IBU-tec Advanced go up and down completely randomly.
Pair Corralation between Wizz Air and IBU-tec Advanced
Assuming the 90 days trading horizon Wizz Air Holdings is expected to generate 0.73 times more return on investment than IBU-tec Advanced. However, Wizz Air Holdings is 1.38 times less risky than IBU-tec Advanced. It trades about 0.0 of its potential returns per unit of risk. IBU tec advanced materials is currently generating about -0.05 per unit of risk. If you would invest 2,276 in Wizz Air Holdings on December 13, 2024 and sell it today you would lose (393.00) from holding Wizz Air Holdings or give up 17.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wizz Air Holdings vs. IBU tec advanced materials
Performance |
| Timeline |
| Wizz Air Holdings |
| IBU tec advanced |
Wizz Air and IBU-tec Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wizz Air and IBU-tec Advanced
The main advantage of trading using opposite Wizz Air and IBU-tec Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wizz Air position performs unexpectedly, IBU-tec Advanced 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 IBU-tec Advanced will offset losses from the drop in IBU-tec Advanced's long position.| Wizz Air vs. PLAYWAY SA ZY 10 | ||
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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