Correlation Between WHA Premium and Golden Ventures

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

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

Diversification Opportunities for WHA Premium and Golden Ventures

-0.02

Correlation Coefficient

WHA Premium  Golden Ventures

Good diversification

The 3 months correlation between WHA and Golden is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding WHA Premium Growth and Golden Ventures Leasehold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Ventures Leasehold and WHA Premium 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 Premium Growth are associated (or correlated) with Golden Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Ventures Leasehold has no effect on the direction of WHA Premium i.e., WHA Premium and Golden Ventures go up and down completely randomly.

Pair Corralation between WHA Premium and Golden Ventures

Assuming the 90 days trading horizon WHA Premium Growth is expected to under-perform the Golden Ventures. But the stock apears to be less risky and, when comparing its historical volatility, WHA Premium Growth is 1.73 times less risky than Golden Ventures. The stock trades about -0.01 of its potential returns per unit of risk. The Golden Ventures Leasehold is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  560.00  in Golden Ventures Leasehold on September 3, 2024 and sell it today you would earn a total of  125.00  from holding Golden Ventures Leasehold or generate 22.32% return on investment over 90 days.

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

WHA Premium Growth  vs.  Golden Ventures Leasehold

WHA Premium Growth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WHA Premium Growth has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, WHA Premium is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Golden Ventures Leasehold

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Ventures Leasehold are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Golden Ventures sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with WHA Premium and Golden Ventures

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

The idea behind WHA Premium Growth and Golden Ventures Leasehold 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.