Correlation Between Western Union and DUET Acquisition
Can any of the company-specific risk be diversified away by investing in both Western Union and DUET Acquisition 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 DUET Acquisition 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 DUET Acquisition Corp, you can compare the effects of market volatilities on Western Union and DUET Acquisition 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 DUET Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Union and DUET Acquisition.
Diversification Opportunities for Western Union and DUET Acquisition
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Western and DUET is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Western Union Co and DUET Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DUET Acquisition Corp 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 DUET Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DUET Acquisition Corp has no effect on the direction of Western Union i.e., Western Union and DUET Acquisition go up and down completely randomly.
Pair Corralation between Western Union and DUET Acquisition
Allowing for the 90-day total investment horizon Western Union Co is expected to under-perform the DUET Acquisition. In addition to that, Western Union is 6.98 times more volatile than DUET Acquisition Corp. It trades about 0.0 of its total potential returns per unit of risk. DUET Acquisition Corp is currently generating about 0.11 per unit of volatility. If you would invest 1,002 in DUET Acquisition Corp on August 30, 2024 and sell it today you would earn a total of 131.00 from holding DUET Acquisition Corp or generate 13.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Western Union Co vs. DUET Acquisition Corp
Performance |
| Timeline |
| Western Union |
| DUET Acquisition Corp |
Western Union and DUET Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Union and DUET Acquisition
The main advantage of trading using opposite Western Union and DUET Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Union position performs unexpectedly, DUET Acquisition 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 DUET Acquisition will offset losses from the drop in DUET Acquisition's long position.| Western Union vs. Navient Corp | Western Union vs. Green Dot | Western Union vs. Orix Corp Ads | Western Union vs. FirstCash |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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