Correlation Between WHA Premium and Bhiraj Office

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

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

Diversification Opportunities for WHA Premium and Bhiraj Office

-0.24

Correlation Coefficient

WHA Premium  Bhiraj Office

Very good diversification

The 3 months correlation between WHA and Bhiraj is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding WHA Premium Growth and Bhiraj Office Leasehold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bhiraj Office Leasehold and WHA Premium 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 Premium Growth are associated (or correlated) with Bhiraj Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bhiraj Office Leasehold has no effect on the direction of WHA Premium i.e., WHA Premium and Bhiraj Office go up and down completely randomly.

Pair Corralation between WHA Premium and Bhiraj Office

Assuming the 90 days trading horizon WHA Premium Growth is expected to generate 1.38 times more return on investment than Bhiraj Office. However, WHA Premium is 1.38 times more volatile than Bhiraj Office Leasehold. It trades about 0.03 of its potential returns per unit of risk. Bhiraj Office Leasehold is currently generating about -0.04 per unit of risk. If you would invest  1,006  in WHA Premium Growth on December 30, 2024 and sell it today you would earn a total of  14.00  from holding WHA Premium Growth or generate 1.39% return on investment over 90 days.

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

WHA Premium Growth  vs.  Bhiraj Office Leasehold

WHA Premium Growth

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in WHA Premium Growth are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, WHA Premium is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Bhiraj Office Leasehold

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bhiraj Office Leasehold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Bhiraj Office is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with WHA Premium and Bhiraj Office

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

The idea behind WHA Premium Growth and Bhiraj Office 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.