Correlation Between WeRide American and Pattern Group

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

By analyzing existing cross correlation between WeRide American Depositary and Pattern Group Series, you can compare the effects of market volatilities on WeRide American and Pattern Group 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 WeRide American with a short position of Pattern Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of WeRide American and Pattern Group.

Diversification Opportunities for WeRide American and Pattern Group

-0.37

Correlation Coefficient

WeRide American  Pattern Group

Very good diversification

The 3 months correlation between WeRide and Pattern is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding WeRide American Depositary and Pattern Group Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pattern Group Series and WeRide American 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 WeRide American Depositary are associated (or correlated) with Pattern Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pattern Group Series has no effect on the direction of WeRide American i.e., WeRide American and Pattern Group go up and down completely randomly.

Pair Corralation between WeRide American and Pattern Group

Considering the 90-day investment horizon WeRide American Depositary is expected to under-perform the Pattern Group. In addition to that, WeRide American is 1.05 times more volatile than Pattern Group Series. It trades about -0.02 of its total potential returns per unit of risk. Pattern Group Series is currently generating about -0.01 per unit of volatility. If you would invest  1,563  in Pattern Group Series on August 27, 2025 and sell it today you would lose (124.00) from holding Pattern Group Series or give up 7.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	74.6%
Values	Daily Returns

WeRide American Depositary  vs.  Pattern Group Series

WeRide American Depo

Risk-Adjusted Performance

Weakest

Over the last 90 days WeRide American Depositary has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, WeRide American is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pattern Group Series

Risk-Adjusted Performance

Weakest

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

Pair Trading with WeRide American and Pattern Group

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

The idea behind WeRide American Depositary and Pattern Group Series 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.