Correlation Between WH Group and Aryzta AG
Can any of the company-specific risk be diversified away by investing in both WH Group and Aryzta AG 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 WH Group and Aryzta AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WH Group Limited and Aryzta AG PK, you can compare the effects of market volatilities on WH Group and Aryzta AG 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 WH Group with a short position of Aryzta AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of WH Group and Aryzta AG.
Diversification Opportunities for WH Group and Aryzta AG
Very good diversification
The 3 months correlation between WHGRF and Aryzta is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding WH Group Limited and Aryzta AG PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aryzta AG PK and WH Group 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 WH Group Limited are associated (or correlated) with Aryzta AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aryzta AG PK has no effect on the direction of WH Group i.e., WH Group and Aryzta AG go up and down completely randomly.
Pair Corralation between WH Group and Aryzta AG
Assuming the 90 days horizon WH Group is expected to generate 6.75 times less return on investment than Aryzta AG. But when comparing it to its historical volatility, WH Group Limited is 11.91 times less risky than Aryzta AG. It trades about 0.21 of its potential returns per unit of risk. Aryzta AG PK is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 80.00 in Aryzta AG PK on September 13, 2024 and sell it today you would earn a total of 6.00 from holding Aryzta AG PK or generate 7.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
WH Group Limited vs. Aryzta AG PK
Performance |
| Timeline |
| WH Group Limited |
| Aryzta AG PK |
WH Group and Aryzta AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WH Group and Aryzta AG
The main advantage of trading using opposite WH Group and Aryzta AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WH Group position performs unexpectedly, Aryzta AG 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 Aryzta AG will offset losses from the drop in Aryzta AG's long position.| WH Group vs. BRF SA ADR | WH Group vs. Pilgrims Pride Corp | WH Group vs. John B Sanfilippo | WH Group vs. Seneca Foods Corp |
| Aryzta AG vs. Artisan Consumer Goods | Aryzta AG vs. Altavoz Entertainment | Aryzta AG vs. Avi Ltd ADR | Aryzta AG vs. The a2 Milk |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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