Correlation Between WonderFi Technologies and BASE
Can any of the company-specific risk be diversified away by investing in both WonderFi Technologies and BASE 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 WonderFi Technologies and BASE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WonderFi Technologies and BASE Inc, you can compare the effects of market volatilities on WonderFi Technologies and BASE 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 WonderFi Technologies with a short position of BASE. Check out your portfolio center. Please also check ongoing floating volatility patterns of WonderFi Technologies and BASE.
Diversification Opportunities for WonderFi Technologies and BASE
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between WonderFi and BASE is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding WonderFi Technologies and BASE Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BASE Inc and WonderFi Technologies 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 WonderFi Technologies are associated (or correlated) with BASE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BASE Inc has no effect on the direction of WonderFi Technologies i.e., WonderFi Technologies and BASE go up and down completely randomly.
Pair Corralation between WonderFi Technologies and BASE
Assuming the 90 days horizon WonderFi Technologies is expected to generate 1.56 times more return on investment than BASE. However, WonderFi Technologies is 1.56 times more volatile than BASE Inc. It trades about 0.03 of its potential returns per unit of risk. BASE Inc is currently generating about 0.01 per unit of risk. If you would invest 17.00 in WonderFi Technologies on September 2, 2024 and sell it today you would earn a total of 0.00 from holding WonderFi Technologies or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
WonderFi Technologies vs. BASE Inc
Performance |
| Timeline |
| WonderFi Technologies |
| BASE Inc |
WonderFi Technologies and BASE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WonderFi Technologies and BASE
The main advantage of trading using opposite WonderFi Technologies and BASE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WonderFi Technologies position performs unexpectedly, BASE 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 BASE will offset losses from the drop in BASE's long position.| WonderFi Technologies vs. Waldencast Acquisition Corp | WonderFi Technologies vs. Alkami Technology | WonderFi Technologies vs. ADEIA P | WonderFi Technologies vs. Paycor HCM |
| BASE vs. CurrentC Power | BASE vs. Agent Information Software | BASE vs. Maxwell Resource | BASE vs. Ackroo Inc |
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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