Correlation Between Webull Incentive and Red Oak

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

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

Diversification Opportunities for Webull Incentive and Red Oak

-0.34

Correlation Coefficient

Webull Incentive  Red Oak

Very good diversification

The 3 months correlation between Webull and Red is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Webull Incentive and Red Oak Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Red Oak Technology and Webull Incentive 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 Webull Incentive are associated (or correlated) with Red Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Red Oak Technology has no effect on the direction of Webull Incentive i.e., Webull Incentive and Red Oak go up and down completely randomly.

Pair Corralation between Webull Incentive and Red Oak

Assuming the 90 days horizon Webull Incentive is expected to generate 41.91 times more return on investment than Red Oak. However, Webull Incentive is 41.91 times more volatile than Red Oak Technology. It trades about 0.09 of its potential returns per unit of risk. Red Oak Technology is currently generating about 0.36 per unit of risk. If you would invest  379.00  in Webull Incentive on May 4, 2025 and sell it today you would lose (192.00) from holding Webull Incentive or give up 50.66% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	64.52%
Values	Daily Returns

Webull Incentive  vs.  Red Oak Technology

Webull Incentive

Risk-Adjusted Performance

OK

Over the last 90 days Webull Incentive has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly weak essential indicators, Webull Incentive showed solid returns over the last few months and may actually be approaching a breakup point.

Red Oak Technology

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Red Oak Technology are ranked lower than 28 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Red Oak showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Webull Incentive and Red Oak

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

The idea behind Webull Incentive and Red Oak Technology 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 Valuation module to check real value of public entities based on technical and fundamental data.