Correlation Between WHA UTILITIES and Globlex Holding

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

By analyzing existing cross correlation between WHA UTILITIES AND and Globlex Holding Management, you can compare the effects of market volatilities on WHA UTILITIES and Globlex Holding 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 UTILITIES with a short position of Globlex Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of WHA UTILITIES and Globlex Holding.

Diversification Opportunities for WHA UTILITIES and Globlex Holding

-0.3

Correlation Coefficient

WHA UTILITIES  Globlex Holding

Very good diversification

The 3 months correlation between WHA and Globlex is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding WHA UTILITIES AND and Globlex Holding Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globlex Holding Mana and WHA UTILITIES 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 UTILITIES AND are associated (or correlated) with Globlex Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globlex Holding Mana has no effect on the direction of WHA UTILITIES i.e., WHA UTILITIES and Globlex Holding go up and down completely randomly.

Pair Corralation between WHA UTILITIES and Globlex Holding

Assuming the 90 days trading horizon WHA UTILITIES is expected to generate 41.05 times less return on investment than Globlex Holding. But when comparing it to its historical volatility, WHA UTILITIES AND is 29.91 times less risky than Globlex Holding. It trades about 0.03 of its potential returns per unit of risk. Globlex Holding Management is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  79.00  in Globlex Holding Management on October 10, 2024 and sell it today you would lose (12.00) from holding Globlex Holding Management or give up 15.19% of portfolio value over 90 days.

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

WHA UTILITIES AND  vs.  Globlex Holding Management

WHA UTILITIES AND

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in WHA UTILITIES AND are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, WHA UTILITIES reported solid returns over the last few months and may actually be approaching a breakup point.

Globlex Holding Mana

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Globlex Holding Management 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 February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with WHA UTILITIES and Globlex Holding

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

The idea behind WHA UTILITIES AND and Globlex Holding Management 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.