Correlation Between Wingstop and CVW CleanTech
Can any of the company-specific risk be diversified away by investing in both Wingstop and CVW CleanTech 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 Wingstop and CVW CleanTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wingstop and CVW CleanTech, you can compare the effects of market volatilities on Wingstop and CVW CleanTech 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 Wingstop with a short position of CVW CleanTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wingstop and CVW CleanTech.
Diversification Opportunities for Wingstop and CVW CleanTech
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Wingstop and CVW is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Wingstop and CVW CleanTech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVW CleanTech and Wingstop 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 Wingstop are associated (or correlated) with CVW CleanTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVW CleanTech has no effect on the direction of Wingstop i.e., Wingstop and CVW CleanTech go up and down completely randomly.
Pair Corralation between Wingstop and CVW CleanTech
Given the investment horizon of 90 days Wingstop is expected to generate 1.52 times more return on investment than CVW CleanTech. However, Wingstop is 1.52 times more volatile than CVW CleanTech. It trades about 0.17 of its potential returns per unit of risk. CVW CleanTech is currently generating about -0.12 per unit of risk. If you would invest 28,420 in Wingstop on November 1, 2024 and sell it today you would earn a total of 1,921 from holding Wingstop or generate 6.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Wingstop vs. CVW CleanTech
Performance |
| Timeline |
| Wingstop |
| CVW CleanTech |
Wingstop and CVW CleanTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wingstop and CVW CleanTech
The main advantage of trading using opposite Wingstop and CVW CleanTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wingstop position performs unexpectedly, CVW CleanTech 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 CVW CleanTech will offset losses from the drop in CVW CleanTech's long position.| Wingstop vs. Papa Johns International | Wingstop vs. Chipotle Mexican Grill | Wingstop vs. The Wendys Co | Wingstop vs. Dominos Pizza Common |
| CVW CleanTech vs. SLR Investment Corp | CVW CleanTech vs. Coffee Holding Co | CVW CleanTech vs. Wingstop | CVW CleanTech vs. Flanigans Enterprises |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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