Correlation Between LH Shopping and WHA Industrial
Can any of the company-specific risk be diversified away by investing in both LH Shopping and WHA Industrial 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 LH Shopping and WHA Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LH Shopping Centers and WHA Industrial Leasehold, you can compare the effects of market volatilities on LH Shopping and WHA Industrial 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 LH Shopping with a short position of WHA Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of LH Shopping and WHA Industrial.
Diversification Opportunities for LH Shopping and WHA Industrial
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between LHSC and WHA is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding LH Shopping Centers and WHA Industrial Leasehold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WHA Industrial Leasehold and LH Shopping 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 LH Shopping Centers are associated (or correlated) with WHA Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WHA Industrial Leasehold has no effect on the direction of LH Shopping i.e., LH Shopping and WHA Industrial go up and down completely randomly.
Pair Corralation between LH Shopping and WHA Industrial
Assuming the 90 days trading horizon LH Shopping Centers is expected to generate 1.28 times more return on investment than WHA Industrial. However, LH Shopping is 1.28 times more volatile than WHA Industrial Leasehold. It trades about 0.05 of its potential returns per unit of risk. WHA Industrial Leasehold is currently generating about 0.02 per unit of risk. If you would invest 836.00 in LH Shopping Centers on September 2, 2024 and sell it today you would earn a total of 294.00 from holding LH Shopping Centers or generate 35.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
LH Shopping Centers vs. WHA Industrial Leasehold
Performance |
| Timeline |
| LH Shopping Centers |
| WHA Industrial Leasehold |
LH Shopping and WHA Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LH Shopping and WHA Industrial
The main advantage of trading using opposite LH Shopping and WHA Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LH Shopping position performs unexpectedly, WHA Industrial 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 WHA Industrial will offset losses from the drop in WHA Industrial's long position.| LH Shopping vs. LH Hotel Leasehold | LH Shopping vs. Impact Growth REIT | LH Shopping vs. Quality Houses Property | LH Shopping vs. CPN Retail Growth |
| WHA Industrial vs. Quality Houses Property | WHA Industrial vs. Ticon Freehold and | WHA Industrial vs. CPN Retail Growth | WHA Industrial vs. Prospect Logistics and |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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