Correlation Between FiscalNote Holdings and High Wire

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

By analyzing existing cross correlation between FiscalNote Holdings and High Wire Networks, you can compare the effects of market volatilities on FiscalNote Holdings and High Wire 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 FiscalNote Holdings with a short position of High Wire. Check out your portfolio center. Please also check ongoing floating volatility patterns of FiscalNote Holdings and High Wire.

Diversification Opportunities for FiscalNote Holdings and High Wire

0.45

Correlation Coefficient

FiscalNote Holdings  High Wire

Very weak diversification

The 3 months correlation between FiscalNote and High is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding FiscalNote Holdings and High Wire Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Wire Networks and FiscalNote Holdings 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 FiscalNote Holdings are associated (or correlated) with High Wire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Wire Networks has no effect on the direction of FiscalNote Holdings i.e., FiscalNote Holdings and High Wire go up and down completely randomly.

Pair Corralation between FiscalNote Holdings and High Wire

Given the investment horizon of 90 days FiscalNote Holdings is expected to generate 3.42 times less return on investment than High Wire. But when comparing it to its historical volatility, FiscalNote Holdings is 3.96 times less risky than High Wire. It trades about 0.18 of its potential returns per unit of risk. High Wire Networks is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  3.82  in High Wire Networks on September 4, 2024 and sell it today you would earn a total of  1.93  from holding High Wire Networks or generate 50.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

FiscalNote Holdings  vs.  High Wire Networks

FiscalNote Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FiscalNote Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

High Wire Networks

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in High Wire Networks are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, High Wire demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FiscalNote Holdings and High Wire

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

The idea behind FiscalNote Holdings and High Wire Networks 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..