Correlation Between Global Power and WHA Utilities
Can any of the company-specific risk be diversified away by investing in both Global Power and WHA Utilities 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 Global Power and WHA Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Power Synergy and WHA Utilities and, you can compare the effects of market volatilities on Global Power and WHA Utilities 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 Global Power with a short position of WHA Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Power and WHA Utilities.
Diversification Opportunities for Global Power and WHA Utilities
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Global and WHA is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Global Power Synergy and WHA Utilities and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WHA Utilities and Global Power 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 Global Power Synergy are associated (or correlated) with WHA Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WHA Utilities has no effect on the direction of Global Power i.e., Global Power and WHA Utilities go up and down completely randomly.
Pair Corralation between Global Power and WHA Utilities
Assuming the 90 days trading horizon Global Power Synergy is expected to generate 0.9 times more return on investment than WHA Utilities. However, Global Power Synergy is 1.12 times less risky than WHA Utilities. It trades about -0.01 of its potential returns per unit of risk. WHA Utilities and is currently generating about -0.13 per unit of risk. If you would invest 4,425 in Global Power Synergy on August 28, 2024 and sell it today you would lose (25.00) from holding Global Power Synergy or give up 0.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Power Synergy vs. WHA Utilities and
Performance |
| Timeline |
| Global Power Synergy |
| WHA Utilities |
Global Power and WHA Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Power and WHA Utilities
The main advantage of trading using opposite Global Power and WHA Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Power position performs unexpectedly, WHA Utilities 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 Utilities will offset losses from the drop in WHA Utilities' long position.| Global Power vs. WHA Public | Global Power vs. TPI Polene Power | Global Power vs. Bangkok Expressway and | Global Power vs. BGrimm Power Public |
| WHA Utilities vs. WHA Public | WHA Utilities vs. Global Power Synergy | WHA Utilities vs. TPI Polene Power | WHA Utilities 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |