Correlation Between Wholetech System and Green World

Can any of the company-specific risk be diversified away by investing in both Wholetech System and Green World 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 Wholetech System and Green World into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Wholetech System Hitech and Green World Fintech, you can compare the effects of market volatilities on Wholetech System and Green World 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 Wholetech System with a short position of Green World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wholetech System and Green World.

Diversification Opportunities for Wholetech System and Green World

0.19

Correlation Coefficient

Wholetech System  Green World

Average diversification

The 3 months correlation between Wholetech and Green is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Wholetech System Hitech and Green World Fintech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green World Fintech and Wholetech System 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 Wholetech System Hitech are associated (or correlated) with Green World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green World Fintech has no effect on the direction of Wholetech System i.e., Wholetech System and Green World go up and down completely randomly.

Pair Corralation between Wholetech System and Green World

Assuming the 90 days trading horizon Wholetech System Hitech is expected to under-perform the Green World. But the stock apears to be less risky and, when comparing its historical volatility, Wholetech System Hitech is 2.03 times less risky than Green World. The stock trades about -0.04 of its potential returns per unit of risk. The Green World Fintech is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  4,910  in Green World Fintech on September 3, 2024 and sell it today you would earn a total of  2,010  from holding Green World Fintech or generate 40.94% return on investment over 90 days.

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

Wholetech System Hitech  vs.  Green World Fintech

Wholetech System Hitech

Risk-Adjusted Performance

0 of 100

Very Weak

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

Green World Fintech

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Green World Fintech are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Green World showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wholetech System and Green World

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

The idea behind Wholetech System Hitech and Green World Fintech 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.