Correlation Between Energy Absolute and WICE Logistics
Can any of the company-specific risk be diversified away by investing in both Energy Absolute and WICE Logistics 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 Energy Absolute and WICE Logistics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energy Absolute Public and WICE Logistics PCL, you can compare the effects of market volatilities on Energy Absolute and WICE Logistics 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 Energy Absolute with a short position of WICE Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Absolute and WICE Logistics.
Diversification Opportunities for Energy Absolute and WICE Logistics
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Energy and WICE is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Energy Absolute Public and WICE Logistics PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WICE Logistics PCL and Energy Absolute 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 Energy Absolute Public are associated (or correlated) with WICE Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WICE Logistics PCL has no effect on the direction of Energy Absolute i.e., Energy Absolute and WICE Logistics go up and down completely randomly.
Pair Corralation between Energy Absolute and WICE Logistics
Assuming the 90 days horizon Energy Absolute Public is expected to generate 2.21 times more return on investment than WICE Logistics. However, Energy Absolute is 2.21 times more volatile than WICE Logistics PCL. It trades about -0.16 of its potential returns per unit of risk. WICE Logistics PCL is currently generating about -0.42 per unit of risk. If you would invest 790.00 in Energy Absolute Public on September 1, 2024 and sell it today you would lose (155.00) from holding Energy Absolute Public or give up 19.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Energy Absolute Public vs. WICE Logistics PCL
Performance |
| Timeline |
| Energy Absolute Public |
| WICE Logistics PCL |
Energy Absolute and WICE Logistics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energy Absolute and WICE Logistics
The main advantage of trading using opposite Energy Absolute and WICE Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Absolute position performs unexpectedly, WICE Logistics 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 WICE Logistics will offset losses from the drop in WICE Logistics' long position.| Energy Absolute vs. Gulf Energy Development | Energy Absolute vs. Global Power Synergy | Energy Absolute vs. CP ALL Public | Energy Absolute vs. Bangkok Dusit Medical |
| WICE Logistics vs. Gulf Energy Development | WICE Logistics vs. Energy Absolute Public | WICE Logistics vs. WHA Public | WICE Logistics vs. Bangkok Expressway and |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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