Correlation Between Bangkok Chain and WHA Public
Can any of the company-specific risk be diversified away by investing in both Bangkok Chain and WHA Public 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 Bangkok Chain and WHA Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bangkok Chain Hospital and WHA Public, you can compare the effects of market volatilities on Bangkok Chain and WHA Public 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 Bangkok Chain with a short position of WHA Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Chain and WHA Public.
Diversification Opportunities for Bangkok Chain and WHA Public
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bangkok and WHA is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Chain Hospital and WHA Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WHA Public and Bangkok Chain 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 Bangkok Chain Hospital are associated (or correlated) with WHA Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WHA Public has no effect on the direction of Bangkok Chain i.e., Bangkok Chain and WHA Public go up and down completely randomly.
Pair Corralation between Bangkok Chain and WHA Public
Assuming the 90 days trading horizon Bangkok Chain Hospital is expected to under-perform the WHA Public. But the stock apears to be less risky and, when comparing its historical volatility, Bangkok Chain Hospital is 1.2 times less risky than WHA Public. The stock trades about -0.01 of its potential returns per unit of risk. The WHA Public is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 427.00 in WHA Public on August 31, 2024 and sell it today you would earn a total of 143.00 from holding WHA Public or generate 33.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bangkok Chain Hospital vs. WHA Public
Performance |
| Timeline |
| Bangkok Chain Hospital |
| WHA Public |
Bangkok Chain and WHA Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangkok Chain and WHA Public
The main advantage of trading using opposite Bangkok Chain and WHA Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Chain position performs unexpectedly, WHA Public 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 WHA Public will offset losses from the drop in WHA Public's long position.| Bangkok Chain vs. AP Public | Bangkok Chain vs. Advanced Information Technology | Bangkok Chain vs. AJ Plast Public | Bangkok Chain vs. Berli Jucker Public |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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