Correlation Between Wisekey International and Crexendo

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

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

Diversification Opportunities for Wisekey International and Crexendo

0.83

Correlation Coefficient

Wisekey International  Crexendo

Very poor diversification

The 3 months correlation between Wisekey and Crexendo is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Wisekey International Holding and Crexendo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crexendo and Wisekey International 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 Wisekey International Holding are associated (or correlated) with Crexendo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crexendo has no effect on the direction of Wisekey International i.e., Wisekey International and Crexendo go up and down completely randomly.

Pair Corralation between Wisekey International and Crexendo

Given the investment horizon of 90 days Wisekey International Holding is expected to generate 0.72 times more return on investment than Crexendo. However, Wisekey International Holding is 1.38 times less risky than Crexendo. It trades about -0.08 of its potential returns per unit of risk. Crexendo is currently generating about -0.15 per unit of risk. If you would invest  205.00  in Wisekey International Holding on February 26, 2024 and sell it today you would lose (14.00) from holding Wisekey International Holding or give up 6.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.45%
Values	Daily Returns

Wisekey International Holding  vs.  Crexendo

Wisekey International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wisekey International Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Crexendo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crexendo 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 fundamental indicators remain very healthy which may send shares a bit higher in June 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Wisekey International and Crexendo

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

The idea behind Wisekey International Holding and Crexendo 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.