Correlation Between Wetzel SA and Bardella

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

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

Diversification Opportunities for Wetzel SA and Bardella

-0.57

Correlation Coefficient

Wetzel SA  Bardella

Excellent diversification

The 3 months correlation between Wetzel and Bardella is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Wetzel SA and Bardella SA Indstrias in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bardella SA Indstrias and Wetzel SA 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 Wetzel SA are associated (or correlated) with Bardella. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bardella SA Indstrias has no effect on the direction of Wetzel SA i.e., Wetzel SA and Bardella go up and down completely randomly.

Pair Corralation between Wetzel SA and Bardella

Assuming the 90 days trading horizon Wetzel SA is expected to generate 2.54 times more return on investment than Bardella. However, Wetzel SA is 2.54 times more volatile than Bardella SA Indstrias. It trades about 0.02 of its potential returns per unit of risk. Bardella SA Indstrias is currently generating about 0.02 per unit of risk. If you would invest  1,300  in Wetzel SA on September 24, 2024 and sell it today you would lose (40.00) from holding Wetzel SA or give up 3.08% of portfolio value over 90 days.

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

Wetzel SA  vs.  Bardella SA Indstrias

Wetzel SA

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Wetzel SA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Wetzel SA unveiled solid returns over the last few months and may actually be approaching a breakup point.

Bardella SA Indstrias

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Wetzel SA and Bardella

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

The idea behind Wetzel SA and Bardella SA Indstrias 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 Global Correlations module to find global opportunities by holding instruments from different markets.