Correlation Between Western Union and Futu Holdings
Can any of the company-specific risk be diversified away by investing in both Western Union and Futu Holdings 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 Futu Holdings 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 Futu Holdings, you can compare the effects of market volatilities on Western Union and Futu Holdings 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 Futu Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Union and Futu Holdings.
Diversification Opportunities for Western Union and Futu Holdings
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and Futu is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Western Union Co and Futu Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Futu Holdings 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 Futu Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Futu Holdings has no effect on the direction of Western Union i.e., Western Union and Futu Holdings go up and down completely randomly.
Pair Corralation between Western Union and Futu Holdings
Allowing for the 90-day total investment horizon Western Union Co is expected to generate 0.23 times more return on investment than Futu Holdings. However, Western Union Co is 4.26 times less risky than Futu Holdings. It trades about -0.05 of its potential returns per unit of risk. Futu Holdings is currently generating about -0.1 per unit of risk. If you would invest 1,122 in Western Union Co on August 27, 2024 and sell it today you would lose (16.00) from holding Western Union Co or give up 1.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Union Co vs. Futu Holdings
Performance |
| Timeline |
| Western Union |
| Futu Holdings |
Western Union and Futu Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Union and Futu Holdings
The main advantage of trading using opposite Western Union and Futu Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Union position performs unexpectedly, Futu Holdings 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 Futu Holdings will offset losses from the drop in Futu Holdings' long position.| Western Union vs. Navient Corp | Western Union vs. Green Dot | Western Union vs. Orix Corp Ads | Western Union vs. FirstCash |
| Futu Holdings vs. Bit Digital | Futu Holdings vs. Xp Inc | Futu Holdings vs. Magic Empire Global | Futu Holdings vs. Applied Blockchain |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |