Correlation Between Wilhelmina and Usio

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

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

Diversification Opportunities for Wilhelmina and Usio

0.38

Correlation Coefficient

Wilhelmina  Usio

Weak diversification

The 3 months correlation between Wilhelmina and Usio is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Wilhelmina and Usio Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Usio Inc and Wilhelmina 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 Wilhelmina are associated (or correlated) with Usio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Usio Inc has no effect on the direction of Wilhelmina i.e., Wilhelmina and Usio go up and down completely randomly.

Pair Corralation between Wilhelmina and Usio

Given the investment horizon of 90 days Wilhelmina is expected to under-perform the Usio. In addition to that, Wilhelmina is 2.31 times more volatile than Usio Inc. It trades about -0.07 of its total potential returns per unit of risk. Usio Inc is currently generating about 0.01 per unit of volatility. If you would invest  151.00  in Usio Inc on September 3, 2024 and sell it today you would earn a total of  0.00  from holding Usio Inc or generate 0.0% return on investment over 90 days.

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

Wilhelmina  vs.  Usio Inc

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 January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Usio Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Usio Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Usio is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Wilhelmina and Usio

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

The idea behind Wilhelmina and Usio Inc 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.