Correlation Between WHA Public and MK Real

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

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

Diversification Opportunities for WHA Public and MK Real

0.69

Correlation Coefficient

WHA Public  MK Real

Poor diversification

The 3 months correlation between WHA and MK Real is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding WHA Public and MK Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MK Real Estate and WHA Public 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 WHA Public are associated (or correlated) with MK Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MK Real Estate has no effect on the direction of WHA Public i.e., WHA Public and MK Real go up and down completely randomly.

Pair Corralation between WHA Public and MK Real

Assuming the 90 days trading horizon WHA Public is expected to under-perform the MK Real. In addition to that, WHA Public is 1.21 times more volatile than MK Real Estate. It trades about -0.26 of its total potential returns per unit of risk. MK Real Estate is currently generating about -0.09 per unit of volatility. If you would invest  163.00  in MK Real Estate on December 4, 2024 and sell it today you would lose (25.00) from holding MK Real Estate or give up 15.34% of portfolio value over 90 days.

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

WHA Public  vs.  MK Real Estate

WHA Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days WHA Public 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 basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

MK Real Estate

Risk-Adjusted Performance

Very Weak

Over the last 90 days MK Real Estate 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 quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with WHA Public and MK Real

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

The idea behind WHA Public and MK Real Estate 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.