Correlation Between Wizz Air and AstraZeneca PLC
Can any of the company-specific risk be diversified away by investing in both Wizz Air and AstraZeneca PLC 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 AstraZeneca PLC 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 AstraZeneca PLC ADR, you can compare the effects of market volatilities on Wizz Air and AstraZeneca PLC 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 AstraZeneca PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wizz Air and AstraZeneca PLC.
Diversification Opportunities for Wizz Air and AstraZeneca PLC
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Wizz and AstraZeneca is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Wizz Air Holdings and AstraZeneca PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AstraZeneca PLC ADR 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 AstraZeneca PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AstraZeneca PLC ADR has no effect on the direction of Wizz Air i.e., Wizz Air and AstraZeneca PLC go up and down completely randomly.
Pair Corralation between Wizz Air and AstraZeneca PLC
Assuming the 90 days trading horizon Wizz Air Holdings is expected to under-perform the AstraZeneca PLC. In addition to that, Wizz Air is 2.39 times more volatile than AstraZeneca PLC ADR. It trades about -0.05 of its total potential returns per unit of risk. AstraZeneca PLC ADR is currently generating about 0.03 per unit of volatility. If you would invest 6,482 in AstraZeneca PLC ADR on November 3, 2024 and sell it today you would earn a total of 571.00 from holding AstraZeneca PLC ADR or generate 8.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Wizz Air Holdings vs. AstraZeneca PLC ADR
Performance |
| Timeline |
| Wizz Air Holdings |
| AstraZeneca PLC ADR |
Wizz Air and AstraZeneca PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wizz Air and AstraZeneca PLC
The main advantage of trading using opposite Wizz Air and AstraZeneca PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wizz Air position performs unexpectedly, AstraZeneca PLC 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 AstraZeneca PLC will offset losses from the drop in AstraZeneca PLC's long position.| Wizz Air vs. Atresmedia | Wizz Air vs. Aeorema Communications Plc | Wizz Air vs. XLMedia PLC | Wizz Air vs. Prosiebensat 1 Media |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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