Correlation Between WHG FINVEST and LIFE CAPITAL

Can any of the company-specific risk be diversified away by investing in both WHG FINVEST and LIFE CAPITAL 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 WHG FINVEST and LIFE CAPITAL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between WHG FINVEST SP and LIFE CAPITAL PARTNERS, you can compare the effects of market volatilities on WHG FINVEST and LIFE CAPITAL 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 WHG FINVEST with a short position of LIFE CAPITAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of WHG FINVEST and LIFE CAPITAL.

Diversification Opportunities for WHG FINVEST and LIFE CAPITAL

-0.82

Correlation Coefficient

WHG FINVEST  LIFE CAPITAL

Pay attention - limited upside

The 3 months correlation between WHG and LIFE is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding WHG FINVEST SP and LIFE CAPITAL PARTNERS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIFE CAPITAL PARTNERS and WHG FINVEST 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 WHG FINVEST SP are associated (or correlated) with LIFE CAPITAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LIFE CAPITAL PARTNERS has no effect on the direction of WHG FINVEST i.e., WHG FINVEST and LIFE CAPITAL go up and down completely randomly.

Pair Corralation between WHG FINVEST and LIFE CAPITAL

Assuming the 90 days trading horizon WHG FINVEST is expected to generate 24.86 times less return on investment than LIFE CAPITAL. But when comparing it to its historical volatility, WHG FINVEST SP is 73.63 times less risky than LIFE CAPITAL. It trades about 0.23 of its potential returns per unit of risk. LIFE CAPITAL PARTNERS is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  839.00  in LIFE CAPITAL PARTNERS on October 10, 2024 and sell it today you would earn a total of  26.00  from holding LIFE CAPITAL PARTNERS or generate 3.1% return on investment over 90 days.

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

WHG FINVEST SP  vs.  LIFE CAPITAL PARTNERS

WHG FINVEST SP

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in WHG FINVEST SP are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak fundamental indicators, WHG FINVEST may actually be approaching a critical reversion point that can send shares even higher in February 2025.

LIFE CAPITAL PARTNERS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LIFE CAPITAL PARTNERS has generated negative risk-adjusted returns adding no value to fund investors. Despite latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with WHG FINVEST and LIFE CAPITAL

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

The idea behind WHG FINVEST SP and LIFE CAPITAL PARTNERS 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.