Correlation Between GobiMin and WH Group

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Can any of the company-specific risk be diversified away by investing in both GobiMin and WH Group 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 GobiMin and WH Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GobiMin and WH Group Limited, you can compare the effects of market volatilities on GobiMin and WH Group 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 GobiMin with a short position of WH Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of GobiMin and WH Group.

Diversification Opportunities for GobiMin and WH Group

0.79
  Correlation Coefficient

Poor diversification

The 3 months correlation between GobiMin and WHGRF is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding GobiMin and WH Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WH Group Limited and GobiMin 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 GobiMin are associated (or correlated) with WH Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WH Group Limited has no effect on the direction of GobiMin i.e., GobiMin and WH Group go up and down completely randomly.

Pair Corralation between GobiMin and WH Group

If you would invest  127.00  in GobiMin on September 6, 2024 and sell it today you would earn a total of  0.00  from holding GobiMin or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy4.55%
ValuesDaily Returns

GobiMin  vs.  WH Group Limited

 Performance 
       Timeline  
GobiMin 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days GobiMin has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, GobiMin is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
WH Group Limited 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in WH Group Limited are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, WH Group reported solid returns over the last few months and may actually be approaching a breakup point.

GobiMin and WH Group Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with GobiMin and WH Group

The main advantage of trading using opposite GobiMin and WH Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GobiMin position performs unexpectedly, WH Group 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 WH Group will offset losses from the drop in WH Group's long position.
The idea behind GobiMin and WH Group Limited 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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