Correlation Between WHA Premium and G Capital

Can any of the company-specific risk be diversified away by investing in both WHA Premium and G Capital 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 Premium and G Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between WHA Premium Growth and G Capital Public, you can compare the effects of market volatilities on WHA Premium and G Capital 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 Premium with a short position of G Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of WHA Premium and G Capital.

Diversification Opportunities for WHA Premium and G Capital

0.36

Correlation Coefficient

WHA Premium  G Capital

Weak diversification

The 3 months correlation between WHA and GCAP is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding WHA Premium Growth and G Capital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G Capital Public and WHA Premium 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 Premium Growth are associated (or correlated) with G Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G Capital Public has no effect on the direction of WHA Premium i.e., WHA Premium and G Capital go up and down completely randomly.

Pair Corralation between WHA Premium and G Capital

Assuming the 90 days trading horizon WHA Premium is expected to generate 10.61 times less return on investment than G Capital. But when comparing it to its historical volatility, WHA Premium Growth is 3.86 times less risky than G Capital. It trades about 0.04 of its potential returns per unit of risk. G Capital Public is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  21.00  in G Capital Public on April 21, 2025 and sell it today you would earn a total of  6.00  from holding G Capital Public or generate 28.57% return on investment over 90 days.

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

WHA Premium Growth  vs.  G Capital Public

WHA Premium Growth

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in WHA Premium Growth are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, WHA Premium is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

G Capital Public

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in G Capital Public are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, G Capital disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with WHA Premium and G Capital

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

The idea behind WHA Premium Growth and G Capital 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.