Correlation Between Premier Marketing and WHA Industrial

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

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

Diversification Opportunities for Premier Marketing and WHA Industrial

-0.84

Correlation Coefficient

Premier Marketing  WHA Industrial

Pay attention - limited upside

The 3 months correlation between Premier and WHA is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Premier Marketing 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 Premier Marketing 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 Premier Marketing 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 Premier Marketing i.e., Premier Marketing and WHA Industrial go up and down completely randomly.

Pair Corralation between Premier Marketing and WHA Industrial

Assuming the 90 days horizon Premier Marketing Public is expected to generate 1.12 times more return on investment than WHA Industrial. However, Premier Marketing is 1.12 times more volatile than WHA Industrial Leasehold. It trades about 0.17 of its potential returns per unit of risk. WHA Industrial Leasehold is currently generating about -0.11 per unit of risk. If you would invest  846.00  in Premier Marketing Public on December 29, 2024 and sell it today you would earn a total of  174.00  from holding Premier Marketing Public or generate 20.57% return on investment over 90 days.

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

Premier Marketing Public  vs.  WHA Industrial Leasehold

Premier Marketing Public

Risk-Adjusted Performance

Good

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

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 latest conflicting performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Premier Marketing and WHA Industrial

The main advantage of trading using opposite Premier Marketing and WHA Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premier Marketing 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 Premier Marketing 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 Stocks Directory module to find actively traded stocks across global markets.