Correlation Between Western Union and Cistera Networks
Can any of the company-specific risk be diversified away by investing in both Western Union and Cistera Networks 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 Western Union and Cistera Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Union Co and Cistera Networks, you can compare the effects of market volatilities on Western Union and Cistera Networks 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 Western Union with a short position of Cistera Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Union and Cistera Networks.
Diversification Opportunities for Western Union and Cistera Networks
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Western and Cistera is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Western Union Co and Cistera Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cistera Networks and Western Union 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 Western Union Co are associated (or correlated) with Cistera Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cistera Networks has no effect on the direction of Western Union i.e., Western Union and Cistera Networks go up and down completely randomly.
Pair Corralation between Western Union and Cistera Networks
Allowing for the 90-day total investment horizon Western Union Co is expected to under-perform the Cistera Networks. But the stock apears to be less risky and, when comparing its historical volatility, Western Union Co is 42.32 times less risky than Cistera Networks. The stock trades about 0.0 of its potential returns per unit of risk. The Cistera Networks is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 0.02 in Cistera Networks on August 29, 2024 and sell it today you would lose (0.01) from holding Cistera Networks or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 94.15% |
| Values | Daily Returns |
Western Union Co vs. Cistera Networks
Performance |
| Timeline |
| Western Union |
| Cistera Networks |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Western Union and Cistera Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Union and Cistera Networks
The main advantage of trading using opposite Western Union and Cistera Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Union position performs unexpectedly, Cistera Networks 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 Cistera Networks will offset losses from the drop in Cistera Networks' long position.| Western Union vs. American Express | Western Union vs. PayPal Holdings | Western Union vs. Capital One Financial | Western Union vs. Upstart Holdings |
| Cistera Networks vs. Codexis | Cistera Networks vs. Brandywine Realty Trust | Cistera Networks vs. NL Industries | Cistera Networks vs. SBM Offshore NV |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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