Correlation Between WHA Premium and Centara Hotels
Can any of the company-specific risk be diversified away by investing in both WHA Premium and Centara Hotels 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 Centara Hotels 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 Centara Hotels Resorts, you can compare the effects of market volatilities on WHA Premium and Centara Hotels 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 Centara Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of WHA Premium and Centara Hotels.
Diversification Opportunities for WHA Premium and Centara Hotels
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between WHA and Centara is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding WHA Premium Growth and Centara Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centara Hotels Resorts 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 Centara Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centara Hotels Resorts has no effect on the direction of WHA Premium i.e., WHA Premium and Centara Hotels go up and down completely randomly.
Pair Corralation between WHA Premium and Centara Hotels
Assuming the 90 days trading horizon WHA Premium is expected to generate 13845.45 times less return on investment than Centara Hotels. But when comparing it to its historical volatility, WHA Premium Growth is 171.03 times less risky than Centara Hotels. It trades about 0.0 of its potential returns per unit of risk. Centara Hotels Resorts is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 452.00 in Centara Hotels Resorts on September 3, 2024 and sell it today you would earn a total of 6.00 from holding Centara Hotels Resorts or generate 1.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WHA Premium Growth vs. Centara Hotels Resorts
Performance |
| Timeline |
| WHA Premium Growth |
| Centara Hotels Resorts |
WHA Premium and Centara Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WHA Premium and Centara Hotels
The main advantage of trading using opposite WHA Premium and Centara Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WHA Premium position performs unexpectedly, Centara Hotels 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 Centara Hotels will offset losses from the drop in Centara Hotels' 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 |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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