Correlation Between Wildcat Resources and Finexia Financial

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

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

Diversification Opportunities for Wildcat Resources and Finexia Financial

-0.4

Correlation Coefficient

Wildcat Resources  Finexia Financial

Very good diversification

The 3 months correlation between Wildcat and Finexia is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Wildcat Resources and Finexia Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finexia Financial and Wildcat Resources 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 Wildcat Resources are associated (or correlated) with Finexia Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finexia Financial has no effect on the direction of Wildcat Resources i.e., Wildcat Resources and Finexia Financial go up and down completely randomly.

Pair Corralation between Wildcat Resources and Finexia Financial

Assuming the 90 days trading horizon Wildcat Resources is expected to under-perform the Finexia Financial. In addition to that, Wildcat Resources is 1.38 times more volatile than Finexia Financial Group. It trades about -0.08 of its total potential returns per unit of risk. Finexia Financial Group is currently generating about 0.05 per unit of volatility. If you would invest  27.00  in Finexia Financial Group on June 20, 2024 and sell it today you would earn a total of  2.00  from holding Finexia Financial Group or generate 7.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Wildcat Resources  vs.  Finexia Financial Group

Wildcat Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wildcat Resources 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 basic indicators remain comparatively stable which may send shares a bit higher in October 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Finexia Financial

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Finexia Financial Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Finexia Financial unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wildcat Resources and Finexia Financial

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

The idea behind Wildcat Resources and Finexia Financial Group 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 Transaction History module to view history of all your transactions and understand their impact on performance.