Correlation Between Network International and WH Group
Can any of the company-specific risk be diversified away by investing in both Network International 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 Network International and WH Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Network International Holdings and WH Group Limited, you can compare the effects of market volatilities on Network International 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 Network International with a short position of WH Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Network International and WH Group.
Diversification Opportunities for Network International and WH Group
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Network and WHGRF is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Network International Holdings 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 Network International 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 Network International Holdings 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 Network International i.e., Network International and WH Group go up and down completely randomly.
Pair Corralation between Network International and WH Group
Assuming the 90 days horizon Network International is expected to generate 2.95 times less return on investment than WH Group. But when comparing it to its historical volatility, Network International Holdings is 3.16 times less risky than WH Group. It trades about 0.21 of its potential returns per unit of risk. WH Group Limited is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 68.00 in WH Group Limited on August 24, 2024 and sell it today you would earn a total of 11.00 from holding WH Group Limited or generate 16.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 56.25% |
| Values | Daily Returns |
Network International Holdings vs. WH Group Limited
Performance |
| Timeline |
| Network International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| WH Group Limited |
Network International and WH Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Network International and WH Group
The main advantage of trading using opposite Network International and WH Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Network International 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.| Network International vs. Cerberus Cyber Sentinel | Network International vs. Gorilla Technology Group | Network International vs. Taoping | Network International vs. Crowdstrike Holdings |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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