Correlation Between Wah Hong and Green World

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

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

Diversification Opportunities for Wah Hong and Green World

0.33

Correlation Coefficient

Wah Hong  Green World

Weak diversification

The 3 months correlation between Wah and Green is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Wah Hong Industrial 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 Wah Hong 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 Wah Hong Industrial 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 Wah Hong i.e., Wah Hong and Green World go up and down completely randomly.

Pair Corralation between Wah Hong and Green World

Assuming the 90 days trading horizon Wah Hong Industrial is expected to generate 1.18 times more return on investment than Green World. However, Wah Hong is 1.18 times more volatile than Green World Fintech. It trades about -0.06 of its potential returns per unit of risk. Green World Fintech is currently generating about -0.15 per unit of risk. If you would invest  4,930  in Wah Hong Industrial on October 23, 2024 and sell it today you would lose (870.00) from holding Wah Hong Industrial or give up 17.65% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Wah Hong Industrial  vs.  Green World Fintech

Wah Hong Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wah Hong Industrial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Green World Fintech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Green World Fintech has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Wah Hong and Green World

The main advantage of trading using opposite Wah Hong and Green World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wah Hong 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 Wah Hong Industrial 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.