Correlation Between Wizz Air and Halfords Group
Can any of the company-specific risk be diversified away by investing in both Wizz Air and Halfords Group 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 Halfords Group 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 Halfords Group PLC, you can compare the effects of market volatilities on Wizz Air and Halfords Group 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 Halfords Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wizz Air and Halfords Group.
Diversification Opportunities for Wizz Air and Halfords Group
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Wizz and Halfords is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Wizz Air Holdings and Halfords Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halfords Group PLC 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 Halfords Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Halfords Group PLC has no effect on the direction of Wizz Air i.e., Wizz Air and Halfords Group go up and down completely randomly.
Pair Corralation between Wizz Air and Halfords Group
Assuming the 90 days trading horizon Wizz Air Holdings is expected to under-perform the Halfords Group. In addition to that, Wizz Air is 1.15 times more volatile than Halfords Group PLC. It trades about -0.02 of its total potential returns per unit of risk. Halfords Group PLC is currently generating about 0.0 per unit of volatility. If you would invest 17,633 in Halfords Group PLC on September 4, 2024 and sell it today you would lose (2,933) from holding Halfords Group PLC or give up 16.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wizz Air Holdings vs. Halfords Group PLC
Performance |
| Timeline |
| Wizz Air Holdings |
| Halfords Group PLC |
Wizz Air and Halfords Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wizz Air and Halfords Group
The main advantage of trading using opposite Wizz Air and Halfords Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wizz Air position performs unexpectedly, Halfords Group 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 Halfords Group will offset losses from the drop in Halfords Group's long position.| Wizz Air vs. Samsung Electronics Co | Wizz Air vs. Samsung Electronics Co | Wizz Air vs. Hyundai Motor | Wizz Air vs. Toyota Motor Corp |
| Halfords Group vs. Datalogic | Halfords Group vs. Alliance Data Systems | Halfords Group vs. Cincinnati Financial Corp | Halfords Group vs. UNIQA Insurance Group |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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