Correlation Between WHA Public and Nusasiri Public

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

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

Diversification Opportunities for WHA Public and Nusasiri Public

-0.52

Correlation Coefficient

WHA Public  Nusasiri Public

Excellent diversification

The 3 months correlation between WHA and Nusasiri is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding WHA Public and Nusasiri Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nusasiri Public 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 Nusasiri Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nusasiri Public has no effect on the direction of WHA Public i.e., WHA Public and Nusasiri Public go up and down completely randomly.

Pair Corralation between WHA Public and Nusasiri Public

Assuming the 90 days trading horizon WHA Public is expected to generate 0.49 times more return on investment than Nusasiri Public. However, WHA Public is 2.06 times less risky than Nusasiri Public. It trades about 0.03 of its potential returns per unit of risk. Nusasiri Public is currently generating about -0.11 per unit of risk. If you would invest  548.00  in WHA Public on September 14, 2024 and sell it today you would earn a total of  12.00  from holding WHA Public or generate 2.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

WHA Public  vs.  Nusasiri Public

WHA Public

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in WHA Public are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, WHA Public is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Nusasiri Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nusasiri 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 forward-looking signals remain quite persistent which may send shares a bit higher in January 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 Nusasiri Public

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

The idea behind WHA Public and Nusasiri Public 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.