Correlation Between Branded Legacy and WH Group
Can any of the company-specific risk be diversified away by investing in both Branded Legacy and WH 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 Branded Legacy and WH Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Branded Legacy and WH Group Limited, you can compare the effects of market volatilities on Branded Legacy and WH 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 Branded Legacy with a short position of WH Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Branded Legacy and WH Group.
Diversification Opportunities for Branded Legacy and WH Group
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Branded and WHGRF is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Branded Legacy and WH Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WH Group Limited and Branded Legacy 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 Branded Legacy are associated (or correlated) with WH Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WH Group Limited has no effect on the direction of Branded Legacy i.e., Branded Legacy and WH Group go up and down completely randomly.
Pair Corralation between Branded Legacy and WH Group
Given the investment horizon of 90 days Branded Legacy is expected to under-perform the WH Group. In addition to that, Branded Legacy is 8.8 times more volatile than WH Group Limited. It trades about -0.04 of its total potential returns per unit of risk. WH Group Limited is currently generating about 0.01 per unit of volatility. If you would invest 81.00 in WH Group Limited on October 15, 2024 and sell it today you would earn a total of 0.00 from holding WH Group Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.0% |
| Values | Daily Returns |
Branded Legacy vs. WH Group Limited
Performance |
| Timeline |
| Branded Legacy |
| WH Group Limited |
Branded Legacy and WH Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Branded Legacy and WH Group
The main advantage of trading using opposite Branded Legacy and WH Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Branded Legacy position performs unexpectedly, WH 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 WH Group will offset losses from the drop in WH Group's long position.| Branded Legacy vs. Premier Foods Plc | Branded Legacy vs. Torque Lifestyle Brands | Branded Legacy vs. Naturally Splendid Enterprises | Branded Legacy vs. Aryzta AG PK |
| WH Group vs. Premier Foods Plc | WH Group vs. Torque Lifestyle Brands | WH Group vs. Naturally Splendid Enterprises | WH Group vs. Aryzta AG PK |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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