Correlation Between Wizz Air and Litigation Capital
Can any of the company-specific risk be diversified away by investing in both Wizz Air and Litigation Capital 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 Litigation Capital 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 Litigation Capital Management, you can compare the effects of market volatilities on Wizz Air and Litigation Capital 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 Litigation Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wizz Air and Litigation Capital.
Diversification Opportunities for Wizz Air and Litigation Capital
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wizz and Litigation is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Wizz Air Holdings and Litigation Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Litigation Capital 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 Litigation Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Litigation Capital has no effect on the direction of Wizz Air i.e., Wizz Air and Litigation Capital go up and down completely randomly.
Pair Corralation between Wizz Air and Litigation Capital
Assuming the 90 days trading horizon Wizz Air Holdings is expected to under-perform the Litigation Capital. In addition to that, Wizz Air is 1.76 times more volatile than Litigation Capital Management. It trades about -0.04 of its total potential returns per unit of risk. Litigation Capital Management is currently generating about 0.02 per unit of volatility. If you would invest 9,535 in Litigation Capital Management on October 16, 2024 and sell it today you would earn a total of 385.00 from holding Litigation Capital Management or generate 4.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wizz Air Holdings vs. Litigation Capital Management
Performance |
| Timeline |
| Wizz Air Holdings |
| Litigation Capital |
Wizz Air and Litigation Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wizz Air and Litigation Capital
The main advantage of trading using opposite Wizz Air and Litigation Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wizz Air position performs unexpectedly, Litigation Capital 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 Litigation Capital will offset losses from the drop in Litigation Capital's long position.| Wizz Air vs. Summit Materials Cl | Wizz Air vs. PPHE Hotel Group | Wizz Air vs. Fidelity National Information | Wizz Air vs. Datagroup SE |
| Litigation Capital vs. Ecofin Global Utilities | Litigation Capital vs. Porvair plc | Litigation Capital vs. Finnair Oyj | Litigation Capital vs. Wizz Air Holdings |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |