Correlation Between NEP Realty and Wattana Karnpaet
Can any of the company-specific risk be diversified away by investing in both NEP Realty and Wattana Karnpaet 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 NEP Realty and Wattana Karnpaet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEP Realty and and Wattana Karnpaet Public, you can compare the effects of market volatilities on NEP Realty and Wattana Karnpaet 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 NEP Realty with a short position of Wattana Karnpaet. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEP Realty and Wattana Karnpaet.
Diversification Opportunities for NEP Realty and Wattana Karnpaet
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NEP and Wattana is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding NEP Realty and and Wattana Karnpaet Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wattana Karnpaet Public and NEP Realty 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 NEP Realty and are associated (or correlated) with Wattana Karnpaet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wattana Karnpaet Public has no effect on the direction of NEP Realty i.e., NEP Realty and Wattana Karnpaet go up and down completely randomly.
Pair Corralation between NEP Realty and Wattana Karnpaet
Assuming the 90 days trading horizon NEP Realty and is expected to under-perform the Wattana Karnpaet. But the stock apears to be less risky and, when comparing its historical volatility, NEP Realty and is 2.2 times less risky than Wattana Karnpaet. The stock trades about -0.21 of its potential returns per unit of risk. The Wattana Karnpaet Public is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 6,225 in Wattana Karnpaet Public on August 29, 2024 and sell it today you would earn a total of 775.00 from holding Wattana Karnpaet Public or generate 12.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.56% |
| Values | Daily Returns |
NEP Realty and vs. Wattana Karnpaet Public
Performance |
| Timeline |
| NEP Realty |
| Wattana Karnpaet Public |
NEP Realty and Wattana Karnpaet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEP Realty and Wattana Karnpaet
The main advantage of trading using opposite NEP Realty and Wattana Karnpaet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEP Realty position performs unexpectedly, Wattana Karnpaet 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 Wattana Karnpaet will offset losses from the drop in Wattana Karnpaet's long position.| NEP Realty vs. 2S Metal Public | NEP Realty vs. AAPICO Hitech Public | NEP Realty vs. Bangsaphan Barmill Public | NEP Realty vs. AJ Plast Public |
| Wattana Karnpaet vs. Nonthavej Hospital Public | Wattana Karnpaet vs. Thonburi Medical Centre | Wattana Karnpaet vs. Mahachai Hospital Public | Wattana Karnpaet vs. Aikchol Hospital Public |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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