Correlation Between Dolby Laboratories and Wex
Can any of the company-specific risk be diversified away by investing in both Dolby Laboratories and Wex 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 Dolby Laboratories and Wex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dolby Laboratories and Wex Inc, you can compare the effects of market volatilities on Dolby Laboratories and Wex 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 Dolby Laboratories with a short position of Wex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dolby Laboratories and Wex.
Diversification Opportunities for Dolby Laboratories and Wex
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dolby and Wex is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Dolby Laboratories and Wex Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wex Inc and Dolby Laboratories 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 Dolby Laboratories are associated (or correlated) with Wex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wex Inc has no effect on the direction of Dolby Laboratories i.e., Dolby Laboratories and Wex go up and down completely randomly.
Pair Corralation between Dolby Laboratories and Wex
Considering the 90-day investment horizon Dolby Laboratories is expected to generate 0.66 times more return on investment than Wex. However, Dolby Laboratories is 1.51 times less risky than Wex. It trades about -0.08 of its potential returns per unit of risk. Wex Inc is currently generating about -0.1 per unit of risk. If you would invest 7,210 in Dolby Laboratories on August 30, 2025 and sell it today you would lose (465.00) from holding Dolby Laboratories or give up 6.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dolby Laboratories vs. Wex Inc
Performance |
| Timeline |
| Dolby Laboratories |
| Wex Inc |
Dolby Laboratories and Wex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dolby Laboratories and Wex
The main advantage of trading using opposite Dolby Laboratories and Wex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dolby Laboratories position performs unexpectedly, Wex 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 Wex will offset losses from the drop in Wex's long position.| Dolby Laboratories vs. Enduro Metals | Dolby Laboratories vs. Fortescue Metals Group | Dolby Laboratories vs. Catalyst Metals Limited | Dolby Laboratories vs. Piedmont Office Realty |
| Wex vs. Zane Interactive Publishing | Wex vs. ISE Chemicals | Wex vs. Jianzhi Education Technology | Wex vs. Education Management Corp |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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