Correlation Between Healthlead Public and WHA Industrial

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

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

Diversification Opportunities for Healthlead Public and WHA Industrial

0.63

Correlation Coefficient

Healthlead Public  WHA Industrial

Poor diversification

The 3 months correlation between Healthlead and WHA is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Healthlead Public and WHA Industrial Leasehold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WHA Industrial Leasehold and Healthlead 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 Healthlead Public are associated (or correlated) with WHA Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WHA Industrial Leasehold has no effect on the direction of Healthlead Public i.e., Healthlead Public and WHA Industrial go up and down completely randomly.

Pair Corralation between Healthlead Public and WHA Industrial

Assuming the 90 days horizon Healthlead Public is expected to generate 5.25 times more return on investment than WHA Industrial. However, Healthlead Public is 5.25 times more volatile than WHA Industrial Leasehold. It trades about 0.04 of its potential returns per unit of risk. WHA Industrial Leasehold is currently generating about 0.12 per unit of risk. If you would invest  990.00  in Healthlead Public on October 10, 2024 and sell it today you would earn a total of  20.00  from holding Healthlead Public or generate 2.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Healthlead Public  vs.  WHA Industrial Leasehold

Healthlead Public

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Healthlead Public are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental drivers, Healthlead Public disclosed solid returns over the last few months and may actually be approaching a breakup point.

WHA Industrial Leasehold

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in WHA Industrial Leasehold are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, WHA Industrial may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Healthlead Public and WHA Industrial

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

The idea behind Healthlead Public and WHA Industrial Leasehold 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.