Correlation Between Parkson Retail and Whitehaven Coal

Can any of the company-specific risk be diversified away by investing in both Parkson Retail and Whitehaven Coal 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 Parkson Retail and Whitehaven Coal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Parkson Retail Group and Whitehaven Coal Limited, you can compare the effects of market volatilities on Parkson Retail and Whitehaven Coal 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 Parkson Retail with a short position of Whitehaven Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parkson Retail and Whitehaven Coal.

Diversification Opportunities for Parkson Retail and Whitehaven Coal

-0.22

Correlation Coefficient

Parkson Retail  Whitehaven Coal

Very good diversification

The 3 months correlation between Parkson and Whitehaven is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Parkson Retail Group and Whitehaven Coal Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whitehaven Coal and Parkson Retail 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 Parkson Retail Group are associated (or correlated) with Whitehaven Coal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whitehaven Coal has no effect on the direction of Parkson Retail i.e., Parkson Retail and Whitehaven Coal go up and down completely randomly.

Pair Corralation between Parkson Retail and Whitehaven Coal

Assuming the 90 days trading horizon Parkson Retail Group is expected to under-perform the Whitehaven Coal. In addition to that, Parkson Retail is 2.12 times more volatile than Whitehaven Coal Limited. It trades about -0.01 of its total potential returns per unit of risk. Whitehaven Coal Limited is currently generating about 0.26 per unit of volatility. If you would invest  265.00  in Whitehaven Coal Limited on April 24, 2025 and sell it today you would earn a total of  102.00  from holding Whitehaven Coal Limited or generate 38.49% return on investment over 90 days.

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

Parkson Retail Group  vs.  Whitehaven Coal Limited

Parkson Retail Group

Risk-Adjusted Performance

Weak

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

Whitehaven Coal

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Whitehaven Coal Limited are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Whitehaven Coal reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Parkson Retail and Whitehaven Coal

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

The idea behind Parkson Retail Group and Whitehaven Coal Limited 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.