Correlation Between Alcadon Group and Waystream Holding

Can any of the company-specific risk be diversified away by investing in both Alcadon Group and Waystream Holding 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 Alcadon Group and Waystream Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Alcadon Group and Waystream Holding

0.81

Correlation Coefficient

Alcadon Group  Waystream Holding

Very poor diversification

The 3 months correlation between Alcadon and Waystream is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Alcadon Group AB and Waystream Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waystream Holding and Alcadon Group 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 Alcadon Group AB are associated (or correlated) with Waystream Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waystream Holding has no effect on the direction of Alcadon Group i.e., Alcadon Group and Waystream Holding go up and down completely randomly.

Pair Corralation between Alcadon Group and Waystream Holding

Assuming the 90 days trading horizon Alcadon Group AB is expected to under-perform the Waystream Holding. But the stock apears to be less risky and, when comparing its historical volatility, Alcadon Group AB is 1.55 times less risky than Waystream Holding. The stock trades about -0.03 of its potential returns per unit of risk. The Waystream Holding AB is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,850  in Waystream Holding AB on April 24, 2025 and sell it today you would earn a total of  1,180  from holding Waystream Holding AB or generate 41.4% return on investment over 90 days.

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

Alcadon Group AB  vs.  Waystream Holding AB

Alcadon Group AB

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Alcadon Group AB are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Alcadon Group unveiled solid returns over the last few months and may actually be approaching a breakup point.

Waystream Holding

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Waystream Holding AB are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Waystream Holding unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alcadon Group and Waystream Holding

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

The idea behind Alcadon Group AB and Waystream Holding AB 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.