Correlation Between WHA Industrial and KGI Securities
Can any of the company-specific risk be diversified away by investing in both WHA Industrial and KGI Securities 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 WHA Industrial and KGI Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WHA Industrial Leasehold and KGI Securities Public, you can compare the effects of market volatilities on WHA Industrial and KGI Securities 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 WHA Industrial with a short position of KGI Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of WHA Industrial and KGI Securities.
Diversification Opportunities for WHA Industrial and KGI Securities
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between WHA and KGI is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding WHA Industrial Leasehold and KGI Securities Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KGI Securities Public and WHA Industrial 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 WHA Industrial Leasehold are associated (or correlated) with KGI Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KGI Securities Public has no effect on the direction of WHA Industrial i.e., WHA Industrial and KGI Securities go up and down completely randomly.
Pair Corralation between WHA Industrial and KGI Securities
Assuming the 90 days trading horizon WHA Industrial Leasehold is expected to generate 1.45 times more return on investment than KGI Securities. However, WHA Industrial is 1.45 times more volatile than KGI Securities Public. It trades about 0.02 of its potential returns per unit of risk. KGI Securities Public is currently generating about -0.01 per unit of risk. If you would invest 627.00 in WHA Industrial Leasehold on August 31, 2024 and sell it today you would earn a total of 33.00 from holding WHA Industrial Leasehold or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WHA Industrial Leasehold vs. KGI Securities Public
Performance |
| Timeline |
| WHA Industrial Leasehold |
| KGI Securities Public |
WHA Industrial and KGI Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WHA Industrial and KGI Securities
The main advantage of trading using opposite WHA Industrial and KGI Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WHA Industrial position performs unexpectedly, KGI Securities 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 KGI Securities will offset losses from the drop in KGI Securities' long position.| WHA Industrial vs. LH Shopping Centers | WHA Industrial vs. HEMARAJ INDUSTRIAL PROPERTY | WHA Industrial vs. Land and Houses |
| KGI Securities vs. Peerapat Technology Public | KGI Securities vs. 2S Metal Public | KGI Securities vs. Silicon Craft Technology | KGI Securities vs. WHA Industrial Leasehold |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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