Correlation Between WHG REAL and Af Invest
Can any of the company-specific risk be diversified away by investing in both WHG REAL and Af Invest 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 WHG REAL and Af Invest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WHG REAL ESTATE and Af Invest Cri, you can compare the effects of market volatilities on WHG REAL and Af Invest 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 WHG REAL with a short position of Af Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of WHG REAL and Af Invest.
Diversification Opportunities for WHG REAL and Af Invest
Very poor diversification
The 3 months correlation between WHG and AFHI11 is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding WHG REAL ESTATE and Af Invest Cri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Af Invest Cri and WHG REAL 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 WHG REAL ESTATE are associated (or correlated) with Af Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Af Invest Cri has no effect on the direction of WHG REAL i.e., WHG REAL and Af Invest go up and down completely randomly.
Pair Corralation between WHG REAL and Af Invest
Assuming the 90 days trading horizon WHG REAL ESTATE is expected to generate 1.62 times more return on investment than Af Invest. However, WHG REAL is 1.62 times more volatile than Af Invest Cri. It trades about 0.22 of its potential returns per unit of risk. Af Invest Cri is currently generating about -0.22 per unit of risk. If you would invest 865.00 in WHG REAL ESTATE on September 5, 2024 and sell it today you would earn a total of 29.00 from holding WHG REAL ESTATE or generate 3.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 90.48% |
| Values | Daily Returns |
WHG REAL ESTATE vs. Af Invest Cri
Performance |
| Timeline |
| WHG REAL ESTATE |
| Af Invest Cri |
WHG REAL and Af Invest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WHG REAL and Af Invest
The main advantage of trading using opposite WHG REAL and Af Invest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WHG REAL position performs unexpectedly, Af Invest 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 Af Invest will offset losses from the drop in Af Invest's long position.| WHG REAL vs. Energisa SA | WHG REAL vs. BTG Pactual Logstica | WHG REAL vs. Plano Plano Desenvolvimento | WHG REAL vs. Companhia Habitasul de |
| Af Invest vs. Fras le SA | Af Invest vs. Western Digital | Af Invest vs. Clave Indices De | Af Invest vs. BTG Pactual Logstica |
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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