Correlation Between WESANA HEALTH and Kawasaki Kisen

Can any of the company-specific risk be diversified away by investing in both WESANA HEALTH and Kawasaki Kisen 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 WESANA HEALTH and Kawasaki Kisen into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between WESANA HEALTH HOLD and Kawasaki Kisen Kaisha, you can compare the effects of market volatilities on WESANA HEALTH and Kawasaki Kisen 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 WESANA HEALTH with a short position of Kawasaki Kisen. Check out your portfolio center. Please also check ongoing floating volatility patterns of WESANA HEALTH and Kawasaki Kisen.

Diversification Opportunities for WESANA HEALTH and Kawasaki Kisen

0.0

Correlation Coefficient

WESANA HEALTH  Kawasaki Kisen

Pay attention - limited upside

The 3 months correlation between WESANA and Kawasaki is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding WESANA HEALTH HOLD and Kawasaki Kisen Kaisha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kawasaki Kisen Kaisha and WESANA HEALTH 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 WESANA HEALTH HOLD are associated (or correlated) with Kawasaki Kisen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kawasaki Kisen Kaisha has no effect on the direction of WESANA HEALTH i.e., WESANA HEALTH and Kawasaki Kisen go up and down completely randomly.

Pair Corralation between WESANA HEALTH and Kawasaki Kisen

Assuming the 90 days horizon WESANA HEALTH HOLD is expected to generate 19.58 times more return on investment than Kawasaki Kisen. However, WESANA HEALTH is 19.58 times more volatile than Kawasaki Kisen Kaisha. It trades about 0.11 of its potential returns per unit of risk. Kawasaki Kisen Kaisha is currently generating about 0.05 per unit of risk. If you would invest  2.60  in WESANA HEALTH HOLD on October 26, 2024 and sell it today you would lose (2.45) from holding WESANA HEALTH HOLD or give up 94.23% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

WESANA HEALTH HOLD  vs.  Kawasaki Kisen Kaisha

WESANA HEALTH HOLD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WESANA HEALTH HOLD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, WESANA HEALTH is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Kawasaki Kisen Kaisha

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kawasaki Kisen Kaisha has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's forward indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with WESANA HEALTH and Kawasaki Kisen

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

The idea behind WESANA HEALTH HOLD and Kawasaki Kisen Kaisha 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.

Check out your portfolio center.

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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.