Correlation Between Quality Houses and WHA Premium
Can any of the company-specific risk be diversified away by investing in both Quality Houses and WHA Premium 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 Quality Houses and WHA Premium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quality Houses Property and WHA Premium Growth, you can compare the effects of market volatilities on Quality Houses and WHA Premium 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 Quality Houses with a short position of WHA Premium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quality Houses and WHA Premium.
Diversification Opportunities for Quality Houses and WHA Premium
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Quality and WHA is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Quality Houses Property and WHA Premium Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WHA Premium Growth and Quality Houses 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 Quality Houses Property are associated (or correlated) with WHA Premium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WHA Premium Growth has no effect on the direction of Quality Houses i.e., Quality Houses and WHA Premium go up and down completely randomly.
Pair Corralation between Quality Houses and WHA Premium
Assuming the 90 days trading horizon Quality Houses Property is expected to under-perform the WHA Premium. In addition to that, Quality Houses is 1.47 times more volatile than WHA Premium Growth. It trades about -0.04 of its total potential returns per unit of risk. WHA Premium Growth is currently generating about 0.02 per unit of volatility. If you would invest 934.00 in WHA Premium Growth on August 31, 2024 and sell it today you would earn a total of 61.00 from holding WHA Premium Growth or generate 6.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quality Houses Property vs. WHA Premium Growth
Performance |
| Timeline |
| Quality Houses Property |
| WHA Premium Growth |
Quality Houses and WHA Premium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quality Houses and WHA Premium
The main advantage of trading using opposite Quality Houses and WHA Premium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quality Houses position performs unexpectedly, WHA Premium 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 Premium will offset losses from the drop in WHA Premium's long position.| Quality Houses vs. Quality Houses Hotel | Quality Houses vs. LH Shopping Centers | Quality Houses vs. LH Hotel Leasehold | Quality Houses vs. Future Park Leasehold |
| WHA Premium vs. WHA Public | WHA Premium vs. CPN Retail Growth | WHA Premium vs. Impact Growth REIT | WHA Premium vs. Digital Telecommunications Infrastructure |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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