Correlation Between Waystream Holding and Alcadon Group

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

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

Diversification Opportunities for Waystream Holding and Alcadon Group

0.8

Correlation Coefficient

Waystream Holding  Alcadon Group

Very poor diversification

The 3 months correlation between Waystream and Alcadon is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Waystream Holding AB and Alcadon Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alcadon Group AB and Waystream Holding 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 Waystream Holding AB are associated (or correlated) with Alcadon Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alcadon Group AB has no effect on the direction of Waystream Holding i.e., Waystream Holding and Alcadon Group go up and down completely randomly.

Pair Corralation between Waystream Holding and Alcadon Group

Assuming the 90 days trading horizon Waystream Holding AB is expected to generate 1.12 times more return on investment than Alcadon Group. However, Waystream Holding is 1.12 times more volatile than Alcadon Group AB. It trades about 0.23 of its potential returns per unit of risk. Alcadon Group AB is currently generating about 0.07 per unit of risk. If you would invest  2,650  in Waystream Holding AB on April 23, 2025 and sell it today you would earn a total of  1,450  from holding Waystream Holding AB or generate 54.72% return on investment over 90 days.

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

Waystream Holding AB  vs.  Alcadon Group AB

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 18 (%) 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.

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 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Alcadon Group may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Waystream Holding and Alcadon Group

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

The idea behind Waystream Holding AB and Alcadon Group 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.

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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.