Correlation Between ENGlobal and Widepoint
Can any of the company-specific risk be diversified away by investing in both ENGlobal and Widepoint 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 ENGlobal and Widepoint into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ENGlobal and Widepoint C, you can compare the effects of market volatilities on ENGlobal and Widepoint 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 ENGlobal with a short position of Widepoint. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENGlobal and Widepoint.
Diversification Opportunities for ENGlobal and Widepoint
Excellent diversification
The 3 months correlation between ENGlobal and Widepoint is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding ENGlobal and Widepoint C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Widepoint C and ENGlobal 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 ENGlobal are associated (or correlated) with Widepoint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Widepoint C has no effect on the direction of ENGlobal i.e., ENGlobal and Widepoint go up and down completely randomly.
Pair Corralation between ENGlobal and Widepoint
Considering the 90-day investment horizon ENGlobal is expected to generate 10.41 times more return on investment than Widepoint. However, ENGlobal is 10.41 times more volatile than Widepoint C. It trades about 0.03 of its potential returns per unit of risk. Widepoint C is currently generating about -0.01 per unit of risk. If you would invest 984.00 in ENGlobal on January 25, 2024 and sell it today you would lose (822.00) from holding ENGlobal or give up 83.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ENGlobal vs. Widepoint C
Performance |
| Timeline |
| ENGlobal |
| Widepoint C |
ENGlobal and Widepoint Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENGlobal and Widepoint
The main advantage of trading using opposite ENGlobal and Widepoint positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENGlobal position performs unexpectedly, Widepoint 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 Widepoint will offset losses from the drop in Widepoint's long position.| ENGlobal vs. Bouygues SA | ENGlobal vs. NV5 Global | ENGlobal vs. MYR Group | ENGlobal vs. Comfort Systems USA |
| Widepoint vs. FiscalNote Holdings | Widepoint vs. Innodata | Widepoint vs. Aurora Innovation | Widepoint vs. Conduent |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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