Correlation Between Hwa Fong and WHA Public
Can any of the company-specific risk be diversified away by investing in both Hwa Fong 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 Hwa Fong and WHA Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hwa Fong Rubber and WHA Public, you can compare the effects of market volatilities on Hwa Fong 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 Hwa Fong with a short position of WHA Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hwa Fong and WHA Public.
Diversification Opportunities for Hwa Fong and WHA Public
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hwa and WHA is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Hwa Fong Rubber and WHA Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WHA Public and Hwa Fong 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 Hwa Fong Rubber 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 Hwa Fong i.e., Hwa Fong and WHA Public go up and down completely randomly.
Pair Corralation between Hwa Fong and WHA Public
Assuming the 90 days trading horizon Hwa Fong Rubber is expected to under-perform the WHA Public. But the stock apears to be less risky and, when comparing its historical volatility, Hwa Fong Rubber is 1.73 times less risky than WHA Public. The stock trades about -0.26 of its potential returns per unit of risk. The WHA Public is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 578.00 in WHA Public on September 1, 2024 and sell it today you would lose (8.00) from holding WHA Public or give up 1.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hwa Fong Rubber vs. WHA Public
Performance |
| Timeline |
| Hwa Fong Rubber |
| WHA Public |
Hwa Fong and WHA Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hwa Fong and WHA Public
The main advantage of trading using opposite Hwa Fong and WHA Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hwa Fong 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.| Hwa Fong vs. TRC Construction Public | Hwa Fong vs. Bangkok Expressway and | Hwa Fong vs. Lohakit Metal Public | Hwa Fong vs. Gunkul Engineering Public |
| WHA Public vs. Land and Houses | WHA Public vs. Bangkok Bank Public | WHA Public vs. Charoen Pokphand Foods |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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