Correlation Between Willdan and Steel Connect
Can any of the company-specific risk be diversified away by investing in both Willdan and Steel Connect 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 Willdan and Steel Connect into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Willdan Group and Steel Connect, you can compare the effects of market volatilities on Willdan and Steel Connect 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 Willdan with a short position of Steel Connect. Check out your portfolio center. Please also check ongoing floating volatility patterns of Willdan and Steel Connect.
Diversification Opportunities for Willdan and Steel Connect
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Willdan and Steel is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Willdan Group and Steel Connect in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steel Connect and Willdan 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 Willdan Group are associated (or correlated) with Steel Connect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steel Connect has no effect on the direction of Willdan i.e., Willdan and Steel Connect go up and down completely randomly.
Pair Corralation between Willdan and Steel Connect
Given the investment horizon of 90 days Willdan Group is expected to generate 0.96 times more return on investment than Steel Connect. However, Willdan Group is 1.04 times less risky than Steel Connect. It trades about 0.11 of its potential returns per unit of risk. Steel Connect is currently generating about 0.04 per unit of risk. If you would invest 2,053 in Willdan Group on September 4, 2024 and sell it today you would earn a total of 2,258 from holding Willdan Group or generate 109.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Willdan Group vs. Steel Connect
Performance |
| Timeline |
| Willdan Group |
| Steel Connect |
Willdan and Steel Connect Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Willdan and Steel Connect
The main advantage of trading using opposite Willdan and Steel Connect positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Willdan position performs unexpectedly, Steel Connect 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 Steel Connect will offset losses from the drop in Steel Connect's long position.| Willdan vs. SNC Lavalin Group | Willdan vs. WSP Global | Willdan vs. Comfort Systems USA | Willdan vs. MYR Group |
| Steel Connect vs. Baosheng Media Group | Steel Connect vs. Impact Fusion International | Steel Connect vs. Mirriad Advertising plc | Steel Connect vs. CyberAgent ADR |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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