Correlation Between World Houseware and SGS SA

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

Diversification Opportunities for World Houseware and SGS SA

0.0

Correlation Coefficient

World Houseware  SGS SA

Pay attention - limited upside

The 3 months correlation between World and SGS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding World Houseware Limited and SGS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SGS SA 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 SGS SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SGS SA has no effect on the direction of World Houseware i.e., World Houseware and SGS SA go up and down completely randomly.

Pair Corralation between World Houseware and SGS SA

If you would invest  5.00  in World Houseware Limited on October 22, 2024 and sell it today you would earn a total of  0.00  from holding World Houseware Limited or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	90.0%
Values	Daily Returns

World Houseware Limited  vs.  SGS SA

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 recent stock price disturbance, may contribute to mid-run losses for the stockholders.

SGS SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SGS SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain fairly 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.

Pair Trading with World Houseware and SGS SA

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

The idea behind World Houseware Limited and SGS SA 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.