Correlation Between Oblong and Wilhelmina

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

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

Diversification Opportunities for Oblong and Wilhelmina

0.08

Correlation Coefficient

Oblong  Wilhelmina

Significant diversification

The 3 months correlation between Oblong and Wilhelmina is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Oblong Inc and Wilhelmina in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilhelmina and Oblong 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 Oblong Inc are associated (or correlated) with Wilhelmina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilhelmina has no effect on the direction of Oblong i.e., Oblong and Wilhelmina go up and down completely randomly.

Pair Corralation between Oblong and Wilhelmina

Given the investment horizon of 90 days Oblong Inc is expected to generate 2.67 times more return on investment than Wilhelmina. However, Oblong is 2.67 times more volatile than Wilhelmina. It trades about 0.05 of its potential returns per unit of risk. Wilhelmina is currently generating about -0.07 per unit of risk. If you would invest  356.00  in Oblong Inc on August 31, 2024 and sell it today you would earn a total of  0.00  from holding Oblong Inc or generate 0.0% return on investment over 90 days.

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

Oblong Inc  vs.  Wilhelmina

Oblong Inc

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Oblong Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating essential indicators, Oblong reported solid returns over the last few months and may actually be approaching a breakup point.

Wilhelmina

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wilhelmina has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Oblong and Wilhelmina

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

The idea behind Oblong Inc and Wilhelmina 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.