Correlation Between WHA Utilities and Ratch Group
Can any of the company-specific risk be diversified away by investing in both WHA Utilities and Ratch Group 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 Ratch Group 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 Ratch Group Public, you can compare the effects of market volatilities on WHA Utilities and Ratch Group 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 Ratch Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of WHA Utilities and Ratch Group.
Diversification Opportunities for WHA Utilities and Ratch Group
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between WHA and Ratch is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding WHA Utilities and and Ratch Group Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ratch Group Public 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 Ratch Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ratch Group Public has no effect on the direction of WHA Utilities i.e., WHA Utilities and Ratch Group go up and down completely randomly.
Pair Corralation between WHA Utilities and Ratch Group
Assuming the 90 days trading horizon WHA Utilities and is expected to generate 1.11 times more return on investment than Ratch Group. However, WHA Utilities is 1.11 times more volatile than Ratch Group Public. It trades about 0.04 of its potential returns per unit of risk. Ratch Group Public is currently generating about -0.03 per unit of risk. If you would invest 372.00 in WHA Utilities and on September 24, 2024 and sell it today you would earn a total of 108.00 from holding WHA Utilities and or generate 29.03% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
WHA Utilities and vs. Ratch Group Public
Performance |
Timeline |
WHA Utilities |
Ratch Group Public |
WHA Utilities and Ratch Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with WHA Utilities and Ratch Group
The main advantage of trading using opposite WHA Utilities and Ratch Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WHA Utilities position performs unexpectedly, Ratch Group 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 Ratch Group will offset losses from the drop in Ratch Group's long position.WHA Utilities vs. Ratch Group Public | WHA Utilities vs. Gulf Energy Development | WHA Utilities vs. BTS Group Holdings | WHA Utilities vs. PTG Energy PCL |
Ratch Group vs. Gulf Energy Development | Ratch Group vs. BTS Group Holdings | Ratch Group vs. PTG Energy PCL |
Check out your portfolio center.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 Transaction History module to view history of all your transactions and understand their impact on performance.
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