Correlation Between Wilhelmina and Network 1

Can any of the company-specific risk be diversified away by investing in both Wilhelmina and Network 1 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 Wilhelmina and Network 1 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Wilhelmina and Network 1 Technologies, you can compare the effects of market volatilities on Wilhelmina and Network 1 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 Wilhelmina with a short position of Network 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wilhelmina and Network 1.

Diversification Opportunities for Wilhelmina and Network 1

0.84

Correlation Coefficient

Wilhelmina  Network 1

Very poor diversification

The 3 months correlation between Wilhelmina and Network is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Wilhelmina and Network 1 Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Network 1 Technologies and Wilhelmina 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 Wilhelmina are associated (or correlated) with Network 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Network 1 Technologies has no effect on the direction of Wilhelmina i.e., Wilhelmina and Network 1 go up and down completely randomly.

Pair Corralation between Wilhelmina and Network 1

Given the investment horizon of 90 days Wilhelmina is expected to generate 1.58 times more return on investment than Network 1. However, Wilhelmina is 1.58 times more volatile than Network 1 Technologies. It trades about -0.02 of its potential returns per unit of risk. Network 1 Technologies is currently generating about -0.04 per unit of risk. If you would invest  520.00  in Wilhelmina on August 25, 2024 and sell it today you would lose (132.00) from holding Wilhelmina or give up 25.38% of portfolio value over 90 days.

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

Wilhelmina  vs.  Network 1 Technologies

Wilhelmina

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wilhelmina has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Network 1 Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Network 1 Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward indicators, Network 1 is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Wilhelmina and Network 1

The main advantage of trading using opposite Wilhelmina and Network 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wilhelmina position performs unexpectedly, Network 1 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 Network 1 will offset losses from the drop in Network 1's long position.

The idea behind Wilhelmina and Network 1 Technologies 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.