Correlation Between WESANA HEALTH and Tokio Marine

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

Diversification Opportunities for WESANA HEALTH and Tokio Marine

0.0

Correlation Coefficient

WESANA HEALTH  Tokio Marine

Pay attention - limited upside

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

Pair Corralation between WESANA HEALTH and Tokio Marine

Assuming the 90 days horizon WESANA HEALTH HOLD is expected to generate 25.6 times more return on investment than Tokio Marine. However, WESANA HEALTH is 25.6 times more volatile than Tokio Marine Holdings. It trades about 0.11 of its potential returns per unit of risk. Tokio Marine Holdings is currently generating about 0.06 per unit of risk. If you would invest  2.30  in WESANA HEALTH HOLD on October 9, 2024 and sell it today you would lose (2.15) from holding WESANA HEALTH HOLD or give up 93.48% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.81%
Values	Daily Returns

WESANA HEALTH HOLD  vs.  Tokio Marine Holdings

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.

Tokio Marine Holdings

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Tokio Marine Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Tokio Marine may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with WESANA HEALTH and Tokio Marine

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

The idea behind WESANA HEALTH HOLD and Tokio Marine Holdings 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.