Correlation Between Wingstop and Via Renewables
Can any of the company-specific risk be diversified away by investing in both Wingstop and Via Renewables 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 Via Renewables into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wingstop and Via Renewables, you can compare the effects of market volatilities on Wingstop and Via Renewables 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 Via Renewables. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wingstop and Via Renewables.
Diversification Opportunities for Wingstop and Via Renewables
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Wingstop and Via is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Wingstop and Via Renewables in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Via Renewables 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 Via Renewables. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Via Renewables has no effect on the direction of Wingstop i.e., Wingstop and Via Renewables go up and down completely randomly.
Pair Corralation between Wingstop and Via Renewables
Given the investment horizon of 90 days Wingstop is expected to generate 0.81 times more return on investment than Via Renewables. However, Wingstop is 1.23 times less risky than Via Renewables. It trades about 0.07 of its potential returns per unit of risk. Via Renewables is currently generating about 0.03 per unit of risk. If you would invest 15,807 in Wingstop on September 2, 2024 and sell it today you would earn a total of 17,070 from holding Wingstop or generate 107.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wingstop vs. Via Renewables
Performance |
| Timeline |
| Wingstop |
| Via Renewables |
Wingstop and Via Renewables Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wingstop and Via Renewables
The main advantage of trading using opposite Wingstop and Via Renewables positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wingstop position performs unexpectedly, Via Renewables 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 Via Renewables will offset losses from the drop in Via Renewables' long position.| Wingstop vs. Papa Johns International | Wingstop vs. Chipotle Mexican Grill | Wingstop vs. The Wendys Co | Wingstop vs. Dominos Pizza |
| Via Renewables vs. CMS Energy | Via Renewables vs. ACRES Commercial Realty | Via Renewables vs. Atlanticus Holdings Corp |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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