Correlation Between My Humble and Wanhwa Enterprise

Can any of the company-specific risk be diversified away by investing in both My Humble and Wanhwa Enterprise 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 My Humble and Wanhwa Enterprise into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between My Humble House and Wanhwa Enterprise Co, you can compare the effects of market volatilities on My Humble and Wanhwa Enterprise 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 My Humble with a short position of Wanhwa Enterprise. Check out your portfolio center. Please also check ongoing floating volatility patterns of My Humble and Wanhwa Enterprise.

Diversification Opportunities for My Humble and Wanhwa Enterprise

-0.29

Correlation Coefficient

My Humble  Wanhwa Enterprise

Very good diversification

The 3 months correlation between 2739 and Wanhwa is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding My Humble House and Wanhwa Enterprise Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wanhwa Enterprise and My Humble 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 My Humble House are associated (or correlated) with Wanhwa Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wanhwa Enterprise has no effect on the direction of My Humble i.e., My Humble and Wanhwa Enterprise go up and down completely randomly.

Pair Corralation between My Humble and Wanhwa Enterprise

Assuming the 90 days trading horizon My Humble House is expected to under-perform the Wanhwa Enterprise. In addition to that, My Humble is 3.4 times more volatile than Wanhwa Enterprise Co. It trades about -0.12 of its total potential returns per unit of risk. Wanhwa Enterprise Co is currently generating about 0.0 per unit of volatility. If you would invest  1,282  in Wanhwa Enterprise Co on September 2, 2024 and sell it today you would lose (2.00) from holding Wanhwa Enterprise Co or give up 0.16% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

My Humble House  vs.  Wanhwa Enterprise Co

My Humble House

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days My Humble House has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Wanhwa Enterprise

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wanhwa Enterprise Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Wanhwa Enterprise is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with My Humble and Wanhwa Enterprise

The main advantage of trading using opposite My Humble and Wanhwa Enterprise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if My Humble position performs unexpectedly, Wanhwa Enterprise 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 Wanhwa Enterprise will offset losses from the drop in Wanhwa Enterprise's long position.

The idea behind My Humble House and Wanhwa Enterprise Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.