Correlation Between Western Acquisition and Integral

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

By analyzing existing cross correlation between Western Acquisition Ventures and Integral Ad Science, you can compare the effects of market volatilities on Western Acquisition and Integral 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 Western Acquisition with a short position of Integral. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Acquisition and Integral.

Diversification Opportunities for Western Acquisition and Integral

0.09

Correlation Coefficient

Western Acquisition  Integral

Significant diversification

The 3 months correlation between Western and Integral is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Western Acquisition Ventures and Integral Ad Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integral Ad Science and Western Acquisition 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 Western Acquisition Ventures are associated (or correlated) with Integral. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integral Ad Science has no effect on the direction of Western Acquisition i.e., Western Acquisition and Integral go up and down completely randomly.

Pair Corralation between Western Acquisition and Integral

Given the investment horizon of 90 days Western Acquisition Ventures is expected to generate 0.48 times more return on investment than Integral. However, Western Acquisition Ventures is 2.07 times less risky than Integral. It trades about -0.07 of its potential returns per unit of risk. Integral Ad Science is currently generating about -0.04 per unit of risk. If you would invest  1,172  in Western Acquisition Ventures on August 20, 2024 and sell it today you would lose (39.00) from holding Western Acquisition Ventures or give up 3.33% of portfolio value over 90 days.

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

Western Acquisition Ventures  vs.  Integral Ad Science

Western Acquisition

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Western Acquisition Ventures are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Western Acquisition may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Integral Ad Science

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integral Ad Science has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Western Acquisition and Integral

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

The idea behind Western Acquisition Ventures and Integral Ad Science 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.