Correlation Between Wholetech System and Newretail

Can any of the company-specific risk be diversified away by investing in both Wholetech System and Newretail 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 Wholetech System and Newretail into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Wholetech System Hitech and Newretail Co, you can compare the effects of market volatilities on Wholetech System and Newretail 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 Wholetech System with a short position of Newretail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wholetech System and Newretail.

Diversification Opportunities for Wholetech System and Newretail

-0.34

Correlation Coefficient

Wholetech System  Newretail

Very good diversification

The 3 months correlation between Wholetech and Newretail is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Wholetech System Hitech and Newretail Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newretail and Wholetech System 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 Wholetech System Hitech are associated (or correlated) with Newretail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newretail has no effect on the direction of Wholetech System i.e., Wholetech System and Newretail go up and down completely randomly.

Pair Corralation between Wholetech System and Newretail

Assuming the 90 days trading horizon Wholetech System is expected to generate 8.13 times less return on investment than Newretail. But when comparing it to its historical volatility, Wholetech System Hitech is 1.61 times less risky than Newretail. It trades about 0.02 of its potential returns per unit of risk. Newretail Co is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  2,095  in Newretail Co on October 1, 2024 and sell it today you would earn a total of  445.00  from holding Newretail Co or generate 21.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Wholetech System Hitech  vs.  Newretail Co

Wholetech System Hitech

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Wholetech System Hitech are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Wholetech System is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Newretail

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Newretail Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Newretail showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wholetech System and Newretail

The main advantage of trading using opposite Wholetech System and Newretail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wholetech System position performs unexpectedly, Newretail 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 Newretail will offset losses from the drop in Newretail's long position.

The idea behind Wholetech System Hitech and Newretail Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.