Correlation Between Tucows and Wajax

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

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

Diversification Opportunities for Tucows and Wajax

0.48

Correlation Coefficient

Tucows  Wajax

Very weak diversification

The 3 months correlation between Tucows and Wajax is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Tucows Inc and Wajax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wajax and Tucows 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 Tucows Inc are associated (or correlated) with Wajax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wajax has no effect on the direction of Tucows i.e., Tucows and Wajax go up and down completely randomly.

Pair Corralation between Tucows and Wajax

Assuming the 90 days horizon Tucows is expected to generate 2.08 times less return on investment than Wajax. In addition to that, Tucows is 2.11 times more volatile than Wajax. It trades about 0.01 of its total potential returns per unit of risk. Wajax is currently generating about 0.05 per unit of volatility. If you would invest  2,227  in Wajax on May 10, 2025 and sell it today you would earn a total of  87.00  from holding Wajax or generate 3.91% return on investment over 90 days.

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

Tucows Inc  vs.  Wajax

Tucows Inc

Risk-Adjusted Performance

Weakest

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

Wajax

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Wajax are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Wajax is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Tucows and Wajax

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

The idea behind Tucows Inc and Wajax 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.

Check out your portfolio center.

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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.