Correlation Between WOLFDEN RES and COFACE SA
Can any of the company-specific risk be diversified away by investing in both WOLFDEN RES and COFACE SA 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 WOLFDEN RES and COFACE SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WOLFDEN RES P and COFACE SA, you can compare the effects of market volatilities on WOLFDEN RES and COFACE SA 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 WOLFDEN RES with a short position of COFACE SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of WOLFDEN RES and COFACE SA.
Diversification Opportunities for WOLFDEN RES and COFACE SA
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between WOLFDEN and COFACE is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding WOLFDEN RES P and COFACE SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COFACE SA and WOLFDEN RES 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 WOLFDEN RES P are associated (or correlated) with COFACE SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COFACE SA has no effect on the direction of WOLFDEN RES i.e., WOLFDEN RES and COFACE SA go up and down completely randomly.
Pair Corralation between WOLFDEN RES and COFACE SA
Assuming the 90 days horizon WOLFDEN RES P is expected to generate 16.57 times more return on investment than COFACE SA. However, WOLFDEN RES is 16.57 times more volatile than COFACE SA. It trades about 0.05 of its potential returns per unit of risk. COFACE SA is currently generating about 0.05 per unit of risk. If you would invest 12.00 in WOLFDEN RES P on October 12, 2024 and sell it today you would lose (9.25) from holding WOLFDEN RES P or give up 77.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WOLFDEN RES P vs. COFACE SA
Performance |
| Timeline |
| WOLFDEN RES P |
| COFACE SA |
WOLFDEN RES and COFACE SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WOLFDEN RES and COFACE SA
The main advantage of trading using opposite WOLFDEN RES and COFACE SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WOLFDEN RES position performs unexpectedly, COFACE SA 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 COFACE SA will offset losses from the drop in COFACE SA's long position.| WOLFDEN RES vs. New Residential Investment | WOLFDEN RES vs. Salesforce | WOLFDEN RES vs. MUTUIONLINE | WOLFDEN RES vs. SLR Investment Corp |
| COFACE SA vs. AEGEAN AIRLINES | COFACE SA vs. Sixt Leasing SE | COFACE SA vs. Clean Energy Fuels | COFACE SA vs. International Consolidated Airlines |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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