Correlation Between WOLFDEN RES and Gateway Real

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

By analyzing existing cross correlation between WOLFDEN RES P and Gateway Real Estate, you can compare the effects of market volatilities on WOLFDEN RES and Gateway Real 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 WOLFDEN RES with a short position of Gateway Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of WOLFDEN RES and Gateway Real.

Diversification Opportunities for WOLFDEN RES and Gateway Real

-0.4

Correlation Coefficient

WOLFDEN RES  Gateway Real

Very good diversification

The 3 months correlation between WOLFDEN and Gateway is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding WOLFDEN RES P and Gateway Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gateway Real Estate and WOLFDEN RES 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 WOLFDEN RES P are associated (or correlated) with Gateway Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gateway Real Estate has no effect on the direction of WOLFDEN RES i.e., WOLFDEN RES and Gateway Real go up and down completely randomly.

Pair Corralation between WOLFDEN RES and Gateway Real

Assuming the 90 days horizon WOLFDEN RES P is expected to generate 3.88 times more return on investment than Gateway Real. However, WOLFDEN RES is 3.88 times more volatile than Gateway Real Estate. It trades about 0.09 of its potential returns per unit of risk. Gateway Real Estate is currently generating about 0.05 per unit of risk. If you would invest  1.75  in WOLFDEN RES P on September 24, 2024 and sell it today you would earn a total of  0.95  from holding WOLFDEN RES P or generate 54.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	97.06%
Values	Daily Returns

WOLFDEN RES P  vs.  Gateway Real Estate

WOLFDEN RES P

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in WOLFDEN RES P are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, WOLFDEN RES reported solid returns over the last few months and may actually be approaching a breakup point.

Gateway Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gateway Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with WOLFDEN RES and Gateway Real

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

The idea behind WOLFDEN RES P and Gateway Real Estate 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.