Correlation Between WPG Holdings and HIM International
Can any of the company-specific risk be diversified away by investing in both WPG Holdings and HIM 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 WPG Holdings and HIM International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WPG Holdings and HIM International Music, you can compare the effects of market volatilities on WPG Holdings and HIM 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 WPG Holdings with a short position of HIM International. Check out your portfolio center. Please also check ongoing floating volatility patterns of WPG Holdings and HIM International.
Diversification Opportunities for WPG Holdings and HIM International
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WPG and HIM is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding WPG Holdings and HIM International Music in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HIM International Music and WPG Holdings 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 WPG Holdings are associated (or correlated) with HIM International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HIM International Music has no effect on the direction of WPG Holdings i.e., WPG Holdings and HIM International go up and down completely randomly.
Pair Corralation between WPG Holdings and HIM International
Assuming the 90 days trading horizon WPG Holdings is expected to under-perform the HIM International. In addition to that, WPG Holdings is 1.16 times more volatile than HIM International Music. It trades about -0.2 of its total potential returns per unit of risk. HIM International Music is currently generating about 0.11 per unit of volatility. If you would invest 11,700 in HIM International Music on August 30, 2024 and sell it today you would earn a total of 450.00 from holding HIM International Music or generate 3.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WPG Holdings vs. HIM International Music
Performance |
| Timeline |
| WPG Holdings |
| HIM International Music |
WPG Holdings and HIM International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WPG Holdings and HIM International
The main advantage of trading using opposite WPG Holdings and HIM International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WPG Holdings position performs unexpectedly, HIM 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 HIM International will offset losses from the drop in HIM International's long position.| WPG Holdings vs. Synnex Technology International | WPG Holdings vs. Powertech Technology | WPG Holdings vs. Wistron Corp | WPG Holdings vs. Chicony Electronics Co |
| HIM International vs. K Way Information | HIM International vs. BenQ Medical Technology | HIM International vs. Sporton International | HIM International vs. Otsuka Information Technology |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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