Correlation Between Wave Entertainment and Asia Green
Can any of the company-specific risk be diversified away by investing in both Wave Entertainment and Asia Green 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 Wave Entertainment and Asia Green into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wave Entertainment Public and Asia Green Energy, you can compare the effects of market volatilities on Wave Entertainment and Asia Green 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 Wave Entertainment with a short position of Asia Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wave Entertainment and Asia Green.
Diversification Opportunities for Wave Entertainment and Asia Green
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wave and Asia is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Wave Entertainment Public and Asia Green Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Green Energy and Wave Entertainment 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 Wave Entertainment Public are associated (or correlated) with Asia Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Green Energy has no effect on the direction of Wave Entertainment i.e., Wave Entertainment and Asia Green go up and down completely randomly.
Pair Corralation between Wave Entertainment and Asia Green
Assuming the 90 days trading horizon Wave Entertainment Public is expected to generate 1.0 times more return on investment than Asia Green. However, Wave Entertainment is 1.0 times more volatile than Asia Green Energy. It trades about 0.04 of its potential returns per unit of risk. Asia Green Energy is currently generating about 0.04 per unit of risk. If you would invest 13.00 in Wave Entertainment Public on August 31, 2024 and sell it today you would lose (2.00) from holding Wave Entertainment Public or give up 15.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wave Entertainment Public vs. Asia Green Energy
Performance |
| Timeline |
| Wave Entertainment Public |
| Asia Green Energy |
Wave Entertainment and Asia Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wave Entertainment and Asia Green
The main advantage of trading using opposite Wave Entertainment and Asia Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wave Entertainment position performs unexpectedly, Asia Green 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 Asia Green will offset losses from the drop in Asia Green's long position.| Wave Entertainment vs. Vibhavadi Medical Center | Wave Entertainment vs. TWZ Public | Wave Entertainment vs. VGI Public | Wave Entertainment vs. Aqua Public |
| Asia Green vs. AP Public | Asia Green vs. Banpu Public | Asia Green vs. Chularat Hospital Public | Asia Green vs. Bangkok Chain Hospital |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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