Correlation Between ChampionX and TWFG,

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

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

Diversification Opportunities for ChampionX and TWFG,

-0.01

Correlation Coefficient

ChampionX  TWFG,

Good diversification

The 3 months correlation between ChampionX and TWFG, is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding ChampionX and TWFG, Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TWFG, Class A and ChampionX 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 ChampionX are associated (or correlated) with TWFG,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TWFG, Class A has no effect on the direction of ChampionX i.e., ChampionX and TWFG, go up and down completely randomly.

Pair Corralation between ChampionX and TWFG,

Considering the 90-day investment horizon ChampionX is expected to under-perform the TWFG,. But the stock apears to be less risky and, when comparing its historical volatility, ChampionX is 1.3 times less risky than TWFG,. The stock trades about -0.13 of its potential returns per unit of risk. The TWFG, Class A is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,790  in TWFG, Class A on September 23, 2024 and sell it today you would earn a total of  133.00  from holding TWFG, Class A or generate 4.77% return on investment over 90 days.

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

ChampionX  vs.  TWFG, Class A

ChampionX

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ChampionX has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

TWFG, Class A

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in TWFG, Class A are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, TWFG, may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with ChampionX and TWFG,

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

The idea behind ChampionX and TWFG, Class A 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.

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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.