Correlation Between Capitalworks Emerging and WT Offshore

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

By analyzing existing cross correlation between Capitalworks Emerging Markets and WT Offshore, you can compare the effects of market volatilities on Capitalworks Emerging and WT Offshore 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 Capitalworks Emerging with a short position of WT Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capitalworks Emerging and WT Offshore.

Diversification Opportunities for Capitalworks Emerging and WT Offshore

-0.1

Correlation Coefficient

Capitalworks Emerging  WT Offshore

Good diversification

The 3 months correlation between Capitalworks and WTI is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Capitalworks Emerging Markets and WT Offshore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WT Offshore and Capitalworks Emerging 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 Capitalworks Emerging Markets are associated (or correlated) with WT Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WT Offshore has no effect on the direction of Capitalworks Emerging i.e., Capitalworks Emerging and WT Offshore go up and down completely randomly.

Pair Corralation between Capitalworks Emerging and WT Offshore

If you would invest  1,057  in Capitalworks Emerging Markets on September 14, 2024 and sell it today you would earn a total of  0.00  from holding Capitalworks Emerging Markets or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Capitalworks Emerging Markets  vs.  WT Offshore

Capitalworks Emerging

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Capitalworks Emerging Markets has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Capitalworks Emerging is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

WT Offshore

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WT Offshore has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Capitalworks Emerging and WT Offshore

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

The idea behind Capitalworks Emerging Markets and WT Offshore 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.