Correlation Between KTBST Mixed and WHA Industrial

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

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

Diversification Opportunities for KTBST Mixed and WHA Industrial

0.42

Correlation Coefficient

KTBST Mixed  WHA Industrial

Very weak diversification

The 3 months correlation between KTBST and WHA is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding KTBST Mixed Leasehold 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 KTBST Mixed 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 KTBST Mixed Leasehold 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 KTBST Mixed i.e., KTBST Mixed and WHA Industrial go up and down completely randomly.

Pair Corralation between KTBST Mixed and WHA Industrial

Assuming the 90 days trading horizon KTBST Mixed Leasehold is expected to under-perform the WHA Industrial. But the stock apears to be less risky and, when comparing its historical volatility, KTBST Mixed Leasehold is 1.02 times less risky than WHA Industrial. The stock trades about -0.2 of its potential returns per unit of risk. The WHA Industrial Leasehold is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  638.00  in WHA Industrial Leasehold on November 20, 2024 and sell it today you would lose (13.00) from holding WHA Industrial Leasehold or give up 2.04% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

KTBST Mixed Leasehold  vs.  WHA Industrial Leasehold

KTBST Mixed Leasehold

Risk-Adjusted Performance

Very Weak

Over the last 90 days KTBST Mixed Leasehold has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

WHA Industrial Leasehold

Risk-Adjusted Performance

Very Weak

Over the last 90 days WHA Industrial Leasehold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, WHA Industrial is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with KTBST Mixed and WHA Industrial

The main advantage of trading using opposite KTBST Mixed and WHA Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KTBST Mixed 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 KTBST Mixed Leasehold 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.