Correlation Between Duolingo and Webull Warrants

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

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

Diversification Opportunities for Duolingo and Webull Warrants

-0.68

Correlation Coefficient

Duolingo  Webull Warrants

Excellent diversification

The 3 months correlation between Duolingo and Webull is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Duolingo and Webull Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Webull Warrants and Duolingo 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 Duolingo are associated (or correlated) with Webull Warrants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Webull Warrants has no effect on the direction of Duolingo i.e., Duolingo and Webull Warrants go up and down completely randomly.

Pair Corralation between Duolingo and Webull Warrants

Given the investment horizon of 90 days Duolingo is expected to under-perform the Webull Warrants. But the stock apears to be less risky and, when comparing its historical volatility, Duolingo is 5.64 times less risky than Webull Warrants. The stock trades about -0.27 of its potential returns per unit of risk. The Webull Warrants is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  249.00  in Webull Warrants on May 5, 2025 and sell it today you would earn a total of  280.00  from holding Webull Warrants or generate 112.45% return on investment over 90 days.

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

Duolingo  vs.  Webull Warrants

Duolingo

Risk-Adjusted Performance

Very Weak

Over the last 90 days Duolingo has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in September 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Webull Warrants

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Webull Warrants are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak essential indicators, Webull Warrants showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Duolingo and Webull Warrants

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

The idea behind Duolingo and Webull Warrants 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.