Correlation Between Wayfair and Service International

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

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

Diversification Opportunities for Wayfair and Service International

0.57

Correlation Coefficient

Wayfair  Service International

Very weak diversification

The 3 months correlation between Wayfair and Service is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Wayfair and Service International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Service International and Wayfair 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 Wayfair are associated (or correlated) with Service International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Service International has no effect on the direction of Wayfair i.e., Wayfair and Service International go up and down completely randomly.

Pair Corralation between Wayfair and Service International

Taking into account the 90-day investment horizon Wayfair is expected to generate 3.21 times more return on investment than Service International. However, Wayfair is 3.21 times more volatile than Service International. It trades about 0.04 of its potential returns per unit of risk. Service International is currently generating about 0.06 per unit of risk. If you would invest  4,962  in Wayfair on July 25, 2025 and sell it today you would earn a total of  3,191  from holding Wayfair or generate 64.31% return on investment over 90 days.

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

Wayfair  vs.  Service International

Wayfair

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Wayfair are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Wayfair showed solid returns over the last few months and may actually be approaching a breakup point.

Service International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Service International are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain fundamental indicators, Service International may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with Wayfair and Service International

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

The idea behind Wayfair and Service International 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.