Correlation Between NAT ABSOLUTE and WHA Industrial

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

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

Diversification Opportunities for NAT ABSOLUTE and WHA Industrial

-0.46

Correlation Coefficient

NAT ABSOLUTE  WHA Industrial

Very good diversification

The 3 months correlation between NAT and WHA is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding NAT ABSOLUTE TECHNOLOGIES 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 NAT ABSOLUTE 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 NAT ABSOLUTE TECHNOLOGIES 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 NAT ABSOLUTE i.e., NAT ABSOLUTE and WHA Industrial go up and down completely randomly.

Pair Corralation between NAT ABSOLUTE and WHA Industrial

Assuming the 90 days trading horizon NAT ABSOLUTE TECHNOLOGIES is expected to under-perform the WHA Industrial. In addition to that, NAT ABSOLUTE is 1.92 times more volatile than WHA Industrial Leasehold. It trades about -0.08 of its total potential returns per unit of risk. WHA Industrial Leasehold is currently generating about 0.17 per unit of volatility. If you would invest  583.00  in WHA Industrial Leasehold on September 1, 2024 and sell it today you would earn a total of  77.00  from holding WHA Industrial Leasehold or generate 13.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

NAT ABSOLUTE TECHNOLOGIES  vs.  WHA Industrial Leasehold

NAT ABSOLUTE TECHNOLOGIES

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NAT ABSOLUTE TECHNOLOGIES has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

WHA Industrial Leasehold

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in WHA Industrial Leasehold are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, WHA Industrial sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NAT ABSOLUTE and WHA Industrial

The main advantage of trading using opposite NAT ABSOLUTE and WHA Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NAT ABSOLUTE 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 NAT ABSOLUTE TECHNOLOGIES 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.