Correlation Between Prospect Logistics and WHA Industrial

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

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

Diversification Opportunities for Prospect Logistics and WHA Industrial

0.59

Correlation Coefficient

Prospect Logistics  WHA Industrial

Very weak diversification

The 3 months correlation between Prospect and WHA is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Prospect Logistics and 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 Prospect Logistics 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 Prospect Logistics and 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 Prospect Logistics i.e., Prospect Logistics and WHA Industrial go up and down completely randomly.

Pair Corralation between Prospect Logistics and WHA Industrial

Assuming the 90 days trading horizon Prospect Logistics and is expected to generate 0.33 times more return on investment than WHA Industrial. However, Prospect Logistics and is 3.0 times less risky than WHA Industrial. It trades about 0.0 of its potential returns per unit of risk. WHA Industrial Leasehold is currently generating about -0.15 per unit of risk. If you would invest  840.00  in Prospect Logistics and on November 30, 2024 and sell it today you would earn a total of  0.00  from holding Prospect Logistics and or generate 0.0% return on investment over 90 days.

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

Prospect Logistics and  vs.  WHA Industrial Leasehold

Prospect Logistics and

Risk-Adjusted Performance

Very Weak

Over the last 90 days Prospect Logistics and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Prospect Logistics is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

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 conflicting performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Prospect Logistics and WHA Industrial

The main advantage of trading using opposite Prospect Logistics and WHA Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prospect Logistics 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 Prospect Logistics and 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.