Correlation Between WSP Global and Cargojet
Can any of the company-specific risk be diversified away by investing in both WSP Global and Cargojet 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 WSP Global and Cargojet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WSP Global and Cargojet, you can compare the effects of market volatilities on WSP Global and Cargojet 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 WSP Global with a short position of Cargojet. Check out your portfolio center. Please also check ongoing floating volatility patterns of WSP Global and Cargojet.
Diversification Opportunities for WSP Global and Cargojet
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between WSP and Cargojet is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding WSP Global and Cargojet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cargojet and WSP Global 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 WSP Global are associated (or correlated) with Cargojet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cargojet has no effect on the direction of WSP Global i.e., WSP Global and Cargojet go up and down completely randomly.
Pair Corralation between WSP Global and Cargojet
Assuming the 90 days trading horizon WSP Global is expected to generate 0.57 times more return on investment than Cargojet. However, WSP Global is 1.75 times less risky than Cargojet. It trades about 0.14 of its potential returns per unit of risk. Cargojet is currently generating about 0.04 per unit of risk. If you would invest 20,431 in WSP Global on August 29, 2024 and sell it today you would earn a total of 4,090 from holding WSP Global or generate 20.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WSP Global vs. Cargojet
Performance |
| Timeline |
| WSP Global |
| Cargojet |
WSP Global and Cargojet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WSP Global and Cargojet
The main advantage of trading using opposite WSP Global and Cargojet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WSP Global position performs unexpectedly, Cargojet 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 Cargojet will offset losses from the drop in Cargojet's long position.| WSP Global vs. TFI International | WSP Global vs. Stantec | WSP Global vs. Waste Connections | WSP Global vs. CGI 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |