Correlation Between TPI Polene and Wave Entertainment
Can any of the company-specific risk be diversified away by investing in both TPI Polene and Wave Entertainment 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 TPI Polene and Wave Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TPI Polene Power and Wave Entertainment Public, you can compare the effects of market volatilities on TPI Polene and Wave Entertainment 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 TPI Polene with a short position of Wave Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of TPI Polene and Wave Entertainment.
Diversification Opportunities for TPI Polene and Wave Entertainment
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between TPI and Wave is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding TPI Polene Power and Wave Entertainment Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wave Entertainment Public and TPI Polene 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 TPI Polene Power are associated (or correlated) with Wave Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wave Entertainment Public has no effect on the direction of TPI Polene i.e., TPI Polene and Wave Entertainment go up and down completely randomly.
Pair Corralation between TPI Polene and Wave Entertainment
Assuming the 90 days trading horizon TPI Polene Power is expected to generate 0.12 times more return on investment than Wave Entertainment. However, TPI Polene Power is 8.59 times less risky than Wave Entertainment. It trades about -0.14 of its potential returns per unit of risk. Wave Entertainment Public is currently generating about -0.11 per unit of risk. If you would invest 304.00 in TPI Polene Power on September 2, 2024 and sell it today you would lose (6.00) from holding TPI Polene Power or give up 1.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TPI Polene Power vs. Wave Entertainment Public
Performance |
| Timeline |
| TPI Polene Power |
| Wave Entertainment Public |
TPI Polene and Wave Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TPI Polene and Wave Entertainment
The main advantage of trading using opposite TPI Polene and Wave Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TPI Polene position performs unexpectedly, Wave Entertainment 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 Wave Entertainment will offset losses from the drop in Wave Entertainment's long position.The idea behind TPI Polene Power and Wave Entertainment Public 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.| Wave Entertainment vs. Bangkok Chain Hospital | Wave Entertainment vs. Grande Asset Hotels | Wave Entertainment vs. Better World Green | Wave Entertainment vs. Chularat 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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