Correlation Between Western Union and MicroCloud Hologram

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

By analyzing existing cross correlation between Western Union Co and MicroCloud Hologram, you can compare the effects of market volatilities on Western Union and MicroCloud Hologram 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 Western Union with a short position of MicroCloud Hologram. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Union and MicroCloud Hologram.

Diversification Opportunities for Western Union and MicroCloud Hologram

0.66

Correlation Coefficient

Western Union  MicroCloud Hologram

Poor diversification

The 3 months correlation between Western and MicroCloud is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Western Union Co and MicroCloud Hologram in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroCloud Hologram and Western Union 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 Western Union Co are associated (or correlated) with MicroCloud Hologram. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroCloud Hologram has no effect on the direction of Western Union i.e., Western Union and MicroCloud Hologram go up and down completely randomly.

Pair Corralation between Western Union and MicroCloud Hologram

Allowing for the 90-day total investment horizon Western Union Co is expected to generate 0.08 times more return on investment than MicroCloud Hologram. However, Western Union Co is 12.45 times less risky than MicroCloud Hologram. It trades about -0.09 of its potential returns per unit of risk. MicroCloud Hologram is currently generating about -0.07 per unit of risk. If you would invest  1,382  in Western Union Co on March 10, 2024 and sell it today you would lose (93.00) from holding Western Union Co or give up 6.73% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Western Union Co  vs.  MicroCloud Hologram

Western Union

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Western Union Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

MicroCloud Hologram

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Western Union and MicroCloud Hologram

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

The idea behind Western Union Co and MicroCloud Hologram 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..