Correlation Between WISE KTAM and United Hero
Can any of the company-specific risk be diversified away by investing in both WISE KTAM and United Hero 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 WISE KTAM and United Hero into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WISE KTAM CSI and United Hero ETF, you can compare the effects of market volatilities on WISE KTAM and United Hero 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 WISE KTAM with a short position of United Hero. Check out your portfolio center. Please also check ongoing floating volatility patterns of WISE KTAM and United Hero.
Diversification Opportunities for WISE KTAM and United Hero
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between WISE and United is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding WISE KTAM CSI and United Hero ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Hero ETF and WISE KTAM 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 WISE KTAM CSI are associated (or correlated) with United Hero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Hero ETF has no effect on the direction of WISE KTAM i.e., WISE KTAM and United Hero go up and down completely randomly.
Pair Corralation between WISE KTAM and United Hero
Assuming the 90 days trading horizon WISE KTAM is expected to generate 330.35 times less return on investment than United Hero. But when comparing it to its historical volatility, WISE KTAM CSI is 102.11 times less risky than United Hero. It trades about 0.05 of its potential returns per unit of risk. United Hero ETF is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 710.00 in United Hero ETF on August 28, 2024 and sell it today you would earn a total of 101.00 from holding United Hero ETF or generate 14.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WISE KTAM CSI vs. United Hero ETF
Performance |
| Timeline |
| WISE KTAM CSI |
| United Hero ETF |
WISE KTAM and United Hero Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WISE KTAM and United Hero
The main advantage of trading using opposite WISE KTAM and United Hero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WISE KTAM position performs unexpectedly, United Hero 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 United Hero will offset losses from the drop in United Hero's long position.The idea behind WISE KTAM CSI and United Hero ETF 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.| United Hero vs. ThaiDex SET50 Exchange | United Hero vs. BCAP MSCI Thailand | United Hero vs. BCAP SET100 | United Hero vs. KTAM Gold ETF |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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