Correlation Between World Houseware and Here Media

Can any of the company-specific risk be diversified away by investing in both World Houseware and Here Media 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 World Houseware and Here Media into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between World Houseware Limited and Here Media, you can compare the effects of market volatilities on World Houseware and Here Media 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 World Houseware with a short position of Here Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of World Houseware and Here Media.

Diversification Opportunities for World Houseware and Here Media

-1.0

Correlation Coefficient

World Houseware  Here Media

Pay attention - limited upside

The 3 months correlation between World and Here is -1.0. Overlapping area represents the amount of risk that can be diversified away by holding World Houseware Limited and Here Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Here Media and World Houseware 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 World Houseware Limited are associated (or correlated) with Here Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Here Media has no effect on the direction of World Houseware i.e., World Houseware and Here Media go up and down completely randomly.

Pair Corralation between World Houseware and Here Media

Assuming the 90 days horizon World Houseware Limited is expected to under-perform the Here Media. But the pink sheet apears to be less risky and, when comparing its historical volatility, World Houseware Limited is 1.07 times less risky than Here Media. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Here Media is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Here Media on September 21, 2024 and sell it today you would earn a total of  0.01  from holding Here Media or generate 100.0% return on investment over 90 days.

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

World Houseware Limited  vs.  Here Media

World Houseware

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days World Houseware Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, World Houseware is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Here Media

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with World Houseware and Here Media

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

The idea behind World Houseware Limited and Here Media 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.