Correlation Between Safety Shot and WD 40

Can any of the company-specific risk be diversified away by investing in both Safety Shot and WD 40 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 Safety Shot and WD 40 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Safety Shot and WD 40 Company, you can compare the effects of market volatilities on Safety Shot and WD 40 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 Safety Shot with a short position of WD 40. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safety Shot and WD 40.

Diversification Opportunities for Safety Shot and WD 40

0.22

Correlation Coefficient

Safety Shot  WD 40

Modest diversification

The 3 months correlation between Safety and WDFC is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Safety Shot and WD 40 Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WD 40 Company and Safety Shot 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 Safety Shot are associated (or correlated) with WD 40. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WD 40 Company has no effect on the direction of Safety Shot i.e., Safety Shot and WD 40 go up and down completely randomly.

Pair Corralation between Safety Shot and WD 40

Given the investment horizon of 90 days Safety Shot is expected to generate 11.63 times more return on investment than WD 40. However, Safety Shot is 11.63 times more volatile than WD 40 Company. It trades about 0.02 of its potential returns per unit of risk. WD 40 Company is currently generating about -0.2 per unit of risk. If you would invest  47.00  in Safety Shot on July 4, 2025 and sell it today you would lose (19.00) from holding Safety Shot or give up 40.43% of portfolio value over 90 days.

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

Safety Shot  vs.  WD 40 Company

Safety Shot

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Safety Shot are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Safety Shot unveiled solid returns over the last few months and may actually be approaching a breakup point.

WD 40 Company

Risk-Adjusted Performance

Weakest

Over the last 90 days WD 40 Company has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in November 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Safety Shot and WD 40

The main advantage of trading using opposite Safety Shot and WD 40 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safety Shot position performs unexpectedly, WD 40 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 WD 40 will offset losses from the drop in WD 40's long position.

The idea behind Safety Shot and WD 40 Company 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.