Correlation Between CSHG Real and WHG REAL

Can any of the company-specific risk be diversified away by investing in both CSHG Real and WHG REAL 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 CSHG Real and WHG REAL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CSHG Real Estate and WHG REAL ESTATE, you can compare the effects of market volatilities on CSHG Real and WHG REAL 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 CSHG Real with a short position of WHG REAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSHG Real and WHG REAL.

Diversification Opportunities for CSHG Real and WHG REAL

0.17

Correlation Coefficient

CSHG Real  WHG REAL

Average diversification

The 3 months correlation between CSHG and WHG is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding CSHG Real Estate and WHG REAL ESTATE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WHG REAL ESTATE and CSHG Real 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 CSHG Real Estate are associated (or correlated) with WHG REAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WHG REAL ESTATE has no effect on the direction of CSHG Real i.e., CSHG Real and WHG REAL go up and down completely randomly.

Pair Corralation between CSHG Real and WHG REAL

Assuming the 90 days trading horizon CSHG Real Estate is expected to generate 1.75 times more return on investment than WHG REAL. However, CSHG Real is 1.75 times more volatile than WHG REAL ESTATE. It trades about 0.08 of its potential returns per unit of risk. WHG REAL ESTATE is currently generating about 0.13 per unit of risk. If you would invest  11,041  in CSHG Real Estate on April 22, 2025 and sell it today you would earn a total of  629.00  from holding CSHG Real Estate or generate 5.7% return on investment over 90 days.

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

CSHG Real Estate  vs.  WHG REAL ESTATE

CSHG Real Estate

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CSHG Real Estate are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, CSHG Real is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

WHG REAL ESTATE

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in WHG REAL ESTATE are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong technical and fundamental indicators, WHG REAL is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with CSHG Real and WHG REAL

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

The idea behind CSHG Real Estate and WHG REAL ESTATE 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.