Correlation Between Wang Lee and Api Group
Can any of the company-specific risk be diversified away by investing in both Wang Lee and Api 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 Wang Lee and Api Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wang Lee Group, and Api Group Corp, you can compare the effects of market volatilities on Wang Lee and Api 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 Wang Lee with a short position of Api Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wang Lee and Api Group.
Diversification Opportunities for Wang Lee and Api Group
Very weak diversification
The 3 months correlation between Wang and Api is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Wang Lee Group, and Api Group Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Api Group Corp and Wang Lee 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 Wang Lee Group, are associated (or correlated) with Api Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Api Group Corp has no effect on the direction of Wang Lee i.e., Wang Lee and Api Group go up and down completely randomly.
Pair Corralation between Wang Lee and Api Group
Given the investment horizon of 90 days Wang Lee Group, is expected to generate 6.15 times more return on investment than Api Group. However, Wang Lee is 6.15 times more volatile than Api Group Corp. It trades about 0.06 of its potential returns per unit of risk. Api Group Corp is currently generating about 0.09 per unit of risk. If you would invest 310.00 in Wang Lee Group, on August 28, 2024 and sell it today you would earn a total of 225.00 from holding Wang Lee Group, or generate 72.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 85.08% |
| Values | Daily Returns |
Wang Lee Group, vs. Api Group Corp
Performance |
| Timeline |
| Wang Lee Group, |
| Api Group Corp |
Wang Lee and Api Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wang Lee and Api Group
The main advantage of trading using opposite Wang Lee and Api Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wang Lee position performs unexpectedly, Api 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 Api Group will offset losses from the drop in Api Group's long position.The idea behind Wang Lee Group, and Api Group Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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