Correlation Between WHA Premium and Quality Houses
Can any of the company-specific risk be diversified away by investing in both WHA Premium and Quality Houses 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 Quality Houses 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 Quality Houses Property, you can compare the effects of market volatilities on WHA Premium and Quality Houses 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 Quality Houses. Check out your portfolio center. Please also check ongoing floating volatility patterns of WHA Premium and Quality Houses.
Diversification Opportunities for WHA Premium and Quality Houses
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WHA and Quality is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding WHA Premium Growth and Quality Houses Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quality Houses Property 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 Quality Houses. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quality Houses Property has no effect on the direction of WHA Premium i.e., WHA Premium and Quality Houses go up and down completely randomly.
Pair Corralation between WHA Premium and Quality Houses
Assuming the 90 days trading horizon WHA Premium Growth is expected to generate 0.68 times more return on investment than Quality Houses. However, WHA Premium Growth is 1.47 times less risky than Quality Houses. It trades about 0.02 of its potential returns per unit of risk. Quality Houses Property is currently generating about -0.04 per unit of risk. 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 |
WHA Premium Growth vs. Quality Houses Property
Performance |
| Timeline |
| WHA Premium Growth |
| Quality Houses Property |
WHA Premium and Quality Houses Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WHA Premium and Quality Houses
The main advantage of trading using opposite WHA Premium and Quality Houses positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WHA Premium position performs unexpectedly, Quality Houses 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 Quality Houses will offset losses from the drop in Quality Houses' 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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