Correlation Between WEBUY GLOBAL and Albertsons Companies

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

By analyzing existing cross correlation between WEBUY GLOBAL LTD and Albertsons Companies, you can compare the effects of market volatilities on WEBUY GLOBAL and Albertsons Companies 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 WEBUY GLOBAL with a short position of Albertsons Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of WEBUY GLOBAL and Albertsons Companies.

Diversification Opportunities for WEBUY GLOBAL and Albertsons Companies

0.25

Correlation Coefficient

WEBUY GLOBAL  Albertsons Companies

Modest diversification

The 3 months correlation between WEBUY and Albertsons is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding WEBUY GLOBAL LTD and Albertsons Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Albertsons Companies and WEBUY GLOBAL 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 WEBUY GLOBAL LTD are associated (or correlated) with Albertsons Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Albertsons Companies has no effect on the direction of WEBUY GLOBAL i.e., WEBUY GLOBAL and Albertsons Companies go up and down completely randomly.

Pair Corralation between WEBUY GLOBAL and Albertsons Companies

Given the investment horizon of 90 days WEBUY GLOBAL LTD is expected to generate 8.67 times more return on investment than Albertsons Companies. However, WEBUY GLOBAL is 8.67 times more volatile than Albertsons Companies. It trades about 0.63 of its potential returns per unit of risk. Albertsons Companies is currently generating about 0.09 per unit of risk. If you would invest  33.00  in WEBUY GLOBAL LTD on February 23, 2024 and sell it today you would earn a total of  41.00  from holding WEBUY GLOBAL LTD or generate 124.24% return on investment over 90 days.

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

WEBUY GLOBAL LTD  vs.  Albertsons Companies

WEBUY GLOBAL LTD

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in WEBUY GLOBAL LTD are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, WEBUY GLOBAL showed solid returns over the last few months and may actually be approaching a breakup point.

Albertsons Companies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Albertsons Companies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, Albertsons Companies is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with WEBUY GLOBAL and Albertsons Companies

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

The idea behind WEBUY GLOBAL LTD and Albertsons Companies 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.