Correlation Between Broadpeak and Weaccess Group

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

By analyzing existing cross correlation between Broadpeak SA and Weaccess Group SA, you can compare the effects of market volatilities on Broadpeak and Weaccess Group 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 Broadpeak with a short position of Weaccess Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Broadpeak and Weaccess Group.

Diversification Opportunities for Broadpeak and Weaccess Group

-0.35

Correlation Coefficient

Broadpeak  Weaccess Group

Very good diversification

The 3 months correlation between Broadpeak and Weaccess is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Broadpeak SA and Weaccess Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weaccess Group SA and Broadpeak 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 Broadpeak SA are associated (or correlated) with Weaccess Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weaccess Group SA has no effect on the direction of Broadpeak i.e., Broadpeak and Weaccess Group go up and down completely randomly.

Pair Corralation between Broadpeak and Weaccess Group

Assuming the 90 days trading horizon Broadpeak SA is expected to under-perform the Weaccess Group. In addition to that, Broadpeak is 7.74 times more volatile than Weaccess Group SA. It trades about -0.32 of its total potential returns per unit of risk. Weaccess Group SA is currently generating about 0.0 per unit of volatility. If you would invest  45.00  in Weaccess Group SA on September 5, 2024 and sell it today you would earn a total of  0.00  from holding Weaccess Group SA or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Broadpeak SA  vs.  Weaccess Group SA

Broadpeak SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Broadpeak SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Weaccess Group SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Weaccess Group SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Weaccess Group is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Broadpeak and Weaccess Group

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

The idea behind Broadpeak SA and Weaccess Group SA 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.