Correlation Between WHA Utilities and VGI Public

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

Diversification Opportunities for WHA Utilities and VGI Public

-0.09

Correlation Coefficient

WHA Utilities  VGI Public

Good diversification

The 3 months correlation between WHA and VGI is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding WHA Utilities and and VGI Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VGI 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 VGI Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VGI Public has no effect on the direction of WHA Utilities i.e., WHA Utilities and VGI Public go up and down completely randomly.

Pair Corralation between WHA Utilities and VGI Public

If you would invest  286.00  in VGI Public on October 11, 2024 and sell it today you would earn a total of  0.00  from holding VGI Public or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	78.95%
Values	Daily Returns

WHA Utilities and  vs.  VGI Public

WHA Utilities

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WHA Utilities and 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.

VGI Public

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days VGI Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat weak fundamental drivers, VGI Public sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with WHA Utilities and VGI Public

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

The idea behind WHA Utilities and and VGI Public 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.

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 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.