Correlation Between WHA Public and Global Power

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

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

Diversification Opportunities for WHA Public and Global Power

-0.51

Correlation Coefficient

WHA Public  Global Power

Excellent diversification

The 3 months correlation between WHA and Global is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding WHA Public and Global Power Synergy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Power Synergy and WHA Public 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 Public are associated (or correlated) with Global Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Power Synergy has no effect on the direction of WHA Public i.e., WHA Public and Global Power go up and down completely randomly.

Pair Corralation between WHA Public and Global Power

Assuming the 90 days trading horizon WHA Public is expected to under-perform the Global Power. In addition to that, WHA Public is 1.17 times more volatile than Global Power Synergy. It trades about -0.03 of its total potential returns per unit of risk. Global Power Synergy is currently generating about 0.03 per unit of volatility. If you would invest  4,100  in Global Power Synergy on September 18, 2024 and sell it today you would earn a total of  25.00  from holding Global Power Synergy or generate 0.61% return on investment over 90 days.

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

WHA Public  vs.  Global Power Synergy

WHA Public

Risk-Adjusted Performance

0 of 100

Very Weak

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

Global Power Synergy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Power Synergy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with WHA Public and Global Power

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

The idea behind WHA Public and Global Power Synergy 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.