Correlation Between Wickes Group and Arcontech Group

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

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

Diversification Opportunities for Wickes Group and Arcontech Group

0.79

Correlation Coefficient

Wickes Group  Arcontech Group

Poor diversification

The 3 months correlation between Wickes and Arcontech is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Wickes Group PLC and Arcontech Group Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arcontech Group Plc and Wickes 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 Wickes Group PLC are associated (or correlated) with Arcontech Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arcontech Group Plc has no effect on the direction of Wickes Group i.e., Wickes Group and Arcontech Group go up and down completely randomly.

Pair Corralation between Wickes Group and Arcontech Group

Assuming the 90 days trading horizon Wickes Group PLC is expected to generate 1.04 times more return on investment than Arcontech Group. However, Wickes Group is 1.04 times more volatile than Arcontech Group Plc. It trades about 0.22 of its potential returns per unit of risk. Arcontech Group Plc is currently generating about 0.15 per unit of risk. If you would invest  18,394  in Wickes Group PLC on April 21, 2025 and sell it today you would earn a total of  4,456  from holding Wickes Group PLC or generate 24.23% return on investment over 90 days.

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

Wickes Group PLC  vs.  Arcontech Group Plc

Wickes Group PLC

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Wickes Group PLC are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Wickes Group exhibited solid returns over the last few months and may actually be approaching a breakup point.

Arcontech Group Plc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Arcontech Group Plc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Arcontech Group exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wickes Group and Arcontech Group

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

The idea behind Wickes Group PLC and Arcontech Group Plc 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.