Correlation Between Western Union and Gen Digital
Can any of the company-specific risk be diversified away by investing in both Western Union and Gen Digital 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 Gen Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Western Union and Gen Digital, you can compare the effects of market volatilities on Western Union and Gen Digital 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 Gen Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Union and Gen Digital.
Diversification Opportunities for Western Union and Gen Digital
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Western and Gen is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding The Western Union and Gen Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gen Digital 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 The Western Union are associated (or correlated) with Gen Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gen Digital has no effect on the direction of Western Union i.e., Western Union and Gen Digital go up and down completely randomly.
Pair Corralation between Western Union and Gen Digital
Assuming the 90 days trading horizon The Western Union is expected to generate 4.32 times more return on investment than Gen Digital. However, Western Union is 4.32 times more volatile than Gen Digital. It trades about 0.04 of its potential returns per unit of risk. Gen Digital is currently generating about 0.05 per unit of risk. If you would invest 7,217 in The Western Union on October 13, 2024 and sell it today you would lose (882.00) from holding The Western Union or give up 12.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.28% |
| Values | Daily Returns |
The Western Union vs. Gen Digital
Performance |
| Timeline |
| Western Union |
| Gen Digital |
Western Union and Gen Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Union and Gen Digital
The main advantage of trading using opposite Western Union and Gen Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Union position performs unexpectedly, Gen Digital 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 Gen Digital will offset losses from the drop in Gen Digital's long position.| Western Union vs. Pentair plc | Western Union vs. Liberty Broadband | Western Union vs. Take Two Interactive Software | Western Union vs. JB Hunt Transport |
| Gen Digital vs. Tyson Foods | Gen Digital vs. United Airlines Holdings | Gen Digital vs. Paycom Software | Gen Digital vs. DXC Technology |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |