Correlation Between Wirtek AS and Pandora AS
Can any of the company-specific risk be diversified away by investing in both Wirtek AS and Pandora AS 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 Wirtek AS and Pandora AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wirtek AS and Pandora AS, you can compare the effects of market volatilities on Wirtek AS and Pandora AS 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 Wirtek AS with a short position of Pandora AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wirtek AS and Pandora AS.
Diversification Opportunities for Wirtek AS and Pandora AS
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Wirtek and Pandora is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Wirtek AS and Pandora AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pandora AS and Wirtek AS 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 Wirtek AS are associated (or correlated) with Pandora AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pandora AS has no effect on the direction of Wirtek AS i.e., Wirtek AS and Pandora AS go up and down completely randomly.
Pair Corralation between Wirtek AS and Pandora AS
Assuming the 90 days trading horizon Wirtek AS is expected to under-perform the Pandora AS. In addition to that, Wirtek AS is 1.19 times more volatile than Pandora AS. It trades about -0.39 of its total potential returns per unit of risk. Pandora AS is currently generating about 0.43 per unit of volatility. If you would invest 109,450 in Pandora AS on September 13, 2024 and sell it today you would earn a total of 17,150 from holding Pandora AS or generate 15.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wirtek AS vs. Pandora AS
Performance |
| Timeline |
| Wirtek AS |
| Pandora AS |
Wirtek AS and Pandora AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wirtek AS and Pandora AS
The main advantage of trading using opposite Wirtek AS and Pandora AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wirtek AS position performs unexpectedly, Pandora AS 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 Pandora AS will offset losses from the drop in Pandora AS's long position.| Wirtek AS vs. cBrain AS | Wirtek AS vs. FOM Technologies AS | Wirtek AS vs. Penneo AS | Wirtek AS vs. Dataproces Group AS |
| Pandora AS vs. Ralph Lauren Corp | Pandora AS vs. Tapestry | Pandora AS vs. PVH Corp | Pandora AS vs. Levi Strauss Co |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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