Correlation Between Western Union and Getty Images
Can any of the company-specific risk be diversified away by investing in both Western Union and Getty Images 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 Getty Images 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 Getty Images Holdings, you can compare the effects of market volatilities on Western Union and Getty Images 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 Getty Images. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Union and Getty Images.
Diversification Opportunities for Western Union and Getty Images
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Western and Getty is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Western Union Co and Getty Images Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Getty Images 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 Getty Images. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Getty Images Holdings has no effect on the direction of Western Union i.e., Western Union and Getty Images go up and down completely randomly.
Pair Corralation between Western Union and Getty Images
Allowing for the 90-day total investment horizon Western Union Co is expected to generate 0.23 times more return on investment than Getty Images. However, Western Union Co is 4.32 times less risky than Getty Images. It trades about -0.03 of its potential returns per unit of risk. Getty Images Holdings is currently generating about -0.24 per unit of risk. If you would invest 1,122 in Western Union Co on August 28, 2024 and sell it today you would lose (12.00) from holding Western Union Co or give up 1.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Union Co vs. Getty Images Holdings
Performance |
| Timeline |
| Western Union |
| Getty Images Holdings |
Western Union and Getty Images Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Union and Getty Images
The main advantage of trading using opposite Western Union and Getty Images positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Union position performs unexpectedly, Getty Images 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 Getty Images will offset losses from the drop in Getty Images' long position.| Western Union vs. American Express | Western Union vs. Morningstar Unconstrained Allocation | Western Union vs. Sitka Gold Corp | Western Union vs. MSCI ACWI exAUCONSUMER |
| Getty Images vs. Twilio Inc | Getty Images vs. Baidu Inc | Getty Images vs. Snap Inc | Getty Images vs. ANGI Homeservices |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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