Correlation Between WHA Industrial and CENTRAL RETAIL

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

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

Diversification Opportunities for WHA Industrial and CENTRAL RETAIL

0.14

Correlation Coefficient

WHA Industrial  CENTRAL RETAIL

Average diversification

The 3 months correlation between WHA and CENTRAL is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding WHA Industrial Leasehold and CENTRAL RETAIL P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CENTRAL RETAIL P and WHA Industrial 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 Industrial Leasehold are associated (or correlated) with CENTRAL RETAIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CENTRAL RETAIL P has no effect on the direction of WHA Industrial i.e., WHA Industrial and CENTRAL RETAIL go up and down completely randomly.

Pair Corralation between WHA Industrial and CENTRAL RETAIL

Assuming the 90 days trading horizon WHA Industrial Leasehold is expected to generate 0.43 times more return on investment than CENTRAL RETAIL. However, WHA Industrial Leasehold is 2.33 times less risky than CENTRAL RETAIL. It trades about -0.1 of its potential returns per unit of risk. CENTRAL RETAIL P is currently generating about -0.13 per unit of risk. If you would invest  638.00  in WHA Industrial Leasehold on December 23, 2024 and sell it today you would lose (68.00) from holding WHA Industrial Leasehold or give up 10.66% of portfolio value over 90 days.

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

WHA Industrial Leasehold  vs.  CENTRAL RETAIL P

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.

CENTRAL RETAIL P

Risk-Adjusted Performance

Very Weak

Over the last 90 days CENTRAL RETAIL P 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 April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with WHA Industrial and CENTRAL RETAIL

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

The idea behind WHA Industrial Leasehold and CENTRAL RETAIL P 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.