Correlation Between WHA Utilities and WHA Public

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

Diversification Opportunities for WHA Utilities and WHA Public

0.58

Correlation Coefficient

WHA Utilities  WHA Public

Very weak diversification

The 3 months correlation between WHA and WHA is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding WHA Utilities and and WHA Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WHA 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 WHA Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WHA Public has no effect on the direction of WHA Utilities i.e., WHA Utilities and WHA Public go up and down completely randomly.

Pair Corralation between WHA Utilities and WHA Public

Assuming the 90 days trading horizon WHA Utilities and is expected to under-perform the WHA Public. In addition to that, WHA Utilities is 1.05 times more volatile than WHA Public. It trades about -0.09 of its total potential returns per unit of risk. WHA Public is currently generating about -0.04 per unit of volatility. If you would invest  553.00  in WHA Public on October 14, 2024 and sell it today you would lose (33.00) from holding WHA Public or give up 5.97% of portfolio value over 90 days.

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

WHA Utilities and  vs.  WHA 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 conflicting performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

WHA Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WHA Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, WHA Public is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with WHA Utilities and WHA Public

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

The idea behind WHA Utilities and and WHA 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.

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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.