Correlation Between WHA Industrial and SC Asset

Can any of the company-specific risk be diversified away by investing in both WHA Industrial and SC Asset 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 SC Asset 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 SC Asset, you can compare the effects of market volatilities on WHA Industrial and SC Asset 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 SC Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of WHA Industrial and SC Asset.

Diversification Opportunities for WHA Industrial and SC Asset

-0.27

Correlation Coefficient

WHA Industrial  SC Asset

Very good diversification

The 3 months correlation between WHA and SC Asset is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding WHA Industrial Leasehold and SC Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SC Asset 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 SC Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SC Asset has no effect on the direction of WHA Industrial i.e., WHA Industrial and SC Asset go up and down completely randomly.

Pair Corralation between WHA Industrial and SC Asset

Assuming the 90 days trading horizon WHA Industrial Leasehold is expected to generate 0.67 times more return on investment than SC Asset. However, WHA Industrial Leasehold is 1.49 times less risky than SC Asset. It trades about 0.13 of its potential returns per unit of risk. SC Asset is currently generating about -0.01 per unit of risk. If you would invest  602.00  in WHA Industrial Leasehold on September 14, 2024 and sell it today you would earn a total of  53.00  from holding WHA Industrial Leasehold or generate 8.8% return on investment over 90 days.

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

WHA Industrial Leasehold  vs.  SC Asset

WHA Industrial Leasehold

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in WHA Industrial Leasehold are ranked lower than 10 (%) 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.

SC Asset

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SC Asset has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, SC Asset is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with WHA Industrial and SC Asset

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

The idea behind WHA Industrial Leasehold and SC Asset 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.