Correlation Between Wt Financial and WA1 Resources
Can any of the company-specific risk be diversified away by investing in both Wt Financial and WA1 Resources 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 Wt Financial and WA1 Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wt Financial Group and WA1 Resources, you can compare the effects of market volatilities on Wt Financial and WA1 Resources 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 Wt Financial with a short position of WA1 Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wt Financial and WA1 Resources.
Diversification Opportunities for Wt Financial and WA1 Resources
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between WTL and WA1 is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Wt Financial Group and WA1 Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WA1 Resources and Wt Financial 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 Wt Financial Group are associated (or correlated) with WA1 Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WA1 Resources has no effect on the direction of Wt Financial i.e., Wt Financial and WA1 Resources go up and down completely randomly.
Pair Corralation between Wt Financial and WA1 Resources
Assuming the 90 days trading horizon Wt Financial Group is expected to under-perform the WA1 Resources. But the stock apears to be less risky and, when comparing its historical volatility, Wt Financial Group is 1.06 times less risky than WA1 Resources. The stock trades about -0.09 of its potential returns per unit of risk. The WA1 Resources is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,352 in WA1 Resources on September 1, 2024 and sell it today you would earn a total of 251.00 from holding WA1 Resources or generate 18.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Wt Financial Group vs. WA1 Resources
Performance |
| Timeline |
| Wt Financial Group |
| WA1 Resources |
Wt Financial and WA1 Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wt Financial and WA1 Resources
The main advantage of trading using opposite Wt Financial and WA1 Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wt Financial position performs unexpectedly, WA1 Resources 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 WA1 Resources will offset losses from the drop in WA1 Resources' long position.| Wt Financial vs. WA1 Resources | Wt Financial vs. Predictive Discovery | Wt Financial vs. Cooper Metals | Wt Financial vs. OD6 Metals |
| WA1 Resources vs. Northern Star Resources | WA1 Resources vs. Evolution Mining | WA1 Resources vs. Bluescope Steel | WA1 Resources vs. Sandfire Resources NL |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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