Correlation Between WHA Premium and CPN Commercial
Can any of the company-specific risk be diversified away by investing in both WHA Premium and CPN Commercial 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 Premium and CPN Commercial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WHA Premium Growth and CPN Commercial Growth, you can compare the effects of market volatilities on WHA Premium and CPN Commercial 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 Premium with a short position of CPN Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of WHA Premium and CPN Commercial.
Diversification Opportunities for WHA Premium and CPN Commercial
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between WHA and CPN is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding WHA Premium Growth and CPN Commercial Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CPN Commercial Growth and WHA Premium 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 Premium Growth are associated (or correlated) with CPN Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CPN Commercial Growth has no effect on the direction of WHA Premium i.e., WHA Premium and CPN Commercial go up and down completely randomly.
Pair Corralation between WHA Premium and CPN Commercial
Assuming the 90 days trading horizon WHA Premium Growth is expected to generate 0.82 times more return on investment than CPN Commercial. However, WHA Premium Growth is 1.23 times less risky than CPN Commercial. It trades about 0.0 of its potential returns per unit of risk. CPN Commercial Growth is currently generating about -0.02 per unit of risk. If you would invest 1,001 in WHA Premium Growth on September 3, 2024 and sell it today you would lose (1.00) from holding WHA Premium Growth or give up 0.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WHA Premium Growth vs. CPN Commercial Growth
Performance |
| Timeline |
| WHA Premium Growth |
| CPN Commercial Growth |
WHA Premium and CPN Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WHA Premium and CPN Commercial
The main advantage of trading using opposite WHA Premium and CPN Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WHA Premium position performs unexpectedly, CPN Commercial 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 CPN Commercial will offset losses from the drop in CPN Commercial's long position.| WHA Premium vs. WHA Public | WHA Premium vs. CPN Retail Growth | WHA Premium vs. Impact Growth REIT | WHA Premium vs. Digital Telecommunications Infrastructure |
| CPN Commercial vs. Digital Telecommunications Infrastructure | CPN Commercial vs. Prime Office Leasehold | CPN Commercial vs. CPN Retail Growth | CPN Commercial vs. Dynasty Ceramic Public |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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