Correlation Between WHA Industrial and GMM Grammy

Can any of the company-specific risk be diversified away by investing in both WHA Industrial and GMM Grammy 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 Industrial and GMM Grammy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between WHA Industrial Leasehold and GMM Grammy Public, you can compare the effects of market volatilities on WHA Industrial and GMM Grammy 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 Industrial with a short position of GMM Grammy. Check out your portfolio center. Please also check ongoing floating volatility patterns of WHA Industrial and GMM Grammy.

Diversification Opportunities for WHA Industrial and GMM Grammy

0.56

Correlation Coefficient

WHA Industrial  GMM Grammy

Very weak diversification

The 3 months correlation between WHA and GMM is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding WHA Industrial Leasehold and GMM Grammy Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GMM Grammy Public and WHA Industrial 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 Industrial Leasehold are associated (or correlated) with GMM Grammy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GMM Grammy Public has no effect on the direction of WHA Industrial i.e., WHA Industrial and GMM Grammy go up and down completely randomly.

Pair Corralation between WHA Industrial and GMM Grammy

Assuming the 90 days trading horizon WHA Industrial is expected to generate 1.08 times less return on investment than GMM Grammy. But when comparing it to its historical volatility, WHA Industrial Leasehold is 1.25 times less risky than GMM Grammy. It trades about 0.14 of its potential returns per unit of risk. GMM Grammy Public is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  735.00  in GMM Grammy Public on September 15, 2024 and sell it today you would earn a total of  75.00  from holding GMM Grammy Public or generate 10.2% return on investment over 90 days.

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

WHA Industrial Leasehold  vs.  GMM Grammy Public

WHA Industrial Leasehold

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in WHA Industrial Leasehold are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, WHA Industrial may actually be approaching a critical reversion point that can send shares even higher in January 2025.

GMM Grammy Public

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GMM Grammy Public are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, GMM Grammy may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with WHA Industrial and GMM Grammy

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

The idea behind WHA Industrial Leasehold and GMM Grammy Public 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.