Correlation Between Windstream Holdings and Basic Energy

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Can any of the company-specific risk be diversified away by investing in both Windstream Holdings and Basic Energy 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 Windstream Holdings and Basic Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Windstream Holdings and Basic Energy Services, you can compare the effects of market volatilities on Windstream Holdings and Basic Energy 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 Windstream Holdings with a short position of Basic Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Windstream Holdings and Basic Energy.

Diversification Opportunities for Windstream Holdings and Basic Energy

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Windstream and Basic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Windstream Holdings and Basic Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Basic Energy Services and Windstream Holdings 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 Windstream Holdings are associated (or correlated) with Basic Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Basic Energy Services has no effect on the direction of Windstream Holdings i.e., Windstream Holdings and Basic Energy go up and down completely randomly.

Pair Corralation between Windstream Holdings and Basic Energy

If you would invest (100.00) in Basic Energy Services on December 29, 2023 and sell it today you would earn a total of  100.00  from holding Basic Energy Services or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Windstream Holdings  vs.  Basic Energy Services

 Performance 
       Timeline  
Windstream Holdings 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Windstream Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Windstream Holdings is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.
Basic Energy Services 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Basic Energy Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Basic Energy is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Windstream Holdings and Basic Energy Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Windstream Holdings and Basic Energy

The main advantage of trading using opposite Windstream Holdings and Basic Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Windstream Holdings position performs unexpectedly, Basic Energy 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 Basic Energy will offset losses from the drop in Basic Energy's long position.
The idea behind Windstream Holdings and Basic Energy Services 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.

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