Correlation Between WESTLIFE FOODWORLD and Transport

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

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

Diversification Opportunities for WESTLIFE FOODWORLD and Transport

0.6

Correlation Coefficient

WESTLIFE FOODWORLD  Transport

Poor diversification

The 3 months correlation between WESTLIFE and Transport is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding WESTLIFE FOODWORLD LIMITED and Transport of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transport and WESTLIFE FOODWORLD 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 WESTLIFE FOODWORLD LIMITED are associated (or correlated) with Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transport has no effect on the direction of WESTLIFE FOODWORLD i.e., WESTLIFE FOODWORLD and Transport go up and down completely randomly.

Pair Corralation between WESTLIFE FOODWORLD and Transport

Assuming the 90 days trading horizon WESTLIFE FOODWORLD LIMITED is expected to generate 1.39 times more return on investment than Transport. However, WESTLIFE FOODWORLD is 1.39 times more volatile than Transport of. It trades about 0.05 of its potential returns per unit of risk. Transport of is currently generating about 0.06 per unit of risk. If you would invest  72,340  in WESTLIFE FOODWORLD LIMITED on April 24, 2025 and sell it today you would earn a total of  3,675  from holding WESTLIFE FOODWORLD LIMITED or generate 5.08% return on investment over 90 days.

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

WESTLIFE FOODWORLD LIMITED  vs.  Transport of

WESTLIFE FOODWORLD

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in WESTLIFE FOODWORLD LIMITED are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain forward indicators, WESTLIFE FOODWORLD may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Transport

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Transport of are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, Transport may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with WESTLIFE FOODWORLD and Transport

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

The idea behind WESTLIFE FOODWORLD LIMITED and Transport of 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.