Correlation Between WHA Industrial and KTBST Mixed

Can any of the company-specific risk be diversified away by investing in both WHA Industrial and KTBST Mixed 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 KTBST Mixed 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 KTBST Mixed Leasehold, you can compare the effects of market volatilities on WHA Industrial and KTBST Mixed 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 KTBST Mixed. Check out your portfolio center. Please also check ongoing floating volatility patterns of WHA Industrial and KTBST Mixed.

Diversification Opportunities for WHA Industrial and KTBST Mixed

0.26

Correlation Coefficient

WHA Industrial  KTBST Mixed

Modest diversification

The 3 months correlation between WHA and KTBST is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding WHA Industrial Leasehold and KTBST Mixed Leasehold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KTBST Mixed Leasehold 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 KTBST Mixed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KTBST Mixed Leasehold has no effect on the direction of WHA Industrial i.e., WHA Industrial and KTBST Mixed go up and down completely randomly.

Pair Corralation between WHA Industrial and KTBST Mixed

Assuming the 90 days trading horizon WHA Industrial Leasehold is expected to generate 1.14 times more return on investment than KTBST Mixed. However, WHA Industrial is 1.14 times more volatile than KTBST Mixed Leasehold. It trades about 0.15 of its potential returns per unit of risk. KTBST Mixed Leasehold is currently generating about 0.02 per unit of risk. If you would invest  583.00  in WHA Industrial Leasehold on August 31, 2024 and sell it today you would earn a total of  67.00  from holding WHA Industrial Leasehold or generate 11.49% return on investment over 90 days.

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

WHA Industrial Leasehold  vs.  KTBST Mixed Leasehold

WHA Industrial Leasehold

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in WHA Industrial Leasehold are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, WHA Industrial may actually be approaching a critical reversion point that can send shares even higher in December 2024.

KTBST Mixed Leasehold

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in KTBST Mixed Leasehold are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, KTBST Mixed is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with WHA Industrial and KTBST Mixed

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

The idea behind WHA Industrial Leasehold and KTBST Mixed 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.