Correlation Between Wave Entertainment and WHA Utilities
Can any of the company-specific risk be diversified away by investing in both Wave Entertainment 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 Wave Entertainment and WHA Utilities 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 WHA Utilities and, you can compare the effects of market volatilities on Wave Entertainment 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 Wave Entertainment with a short position of WHA Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wave Entertainment and WHA Utilities.
Diversification Opportunities for Wave Entertainment and WHA Utilities
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Wave and WHA is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Wave Entertainment Public and WHA Utilities and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WHA Utilities 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 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 Wave Entertainment i.e., Wave Entertainment and WHA Utilities go up and down completely randomly.
Pair Corralation between Wave Entertainment and WHA Utilities
Assuming the 90 days trading horizon Wave Entertainment Public is expected to under-perform the WHA Utilities. In addition to that, Wave Entertainment is 2.85 times more volatile than WHA Utilities and. It trades about -0.11 of its total potential returns per unit of risk. WHA Utilities and is currently generating about -0.24 per unit of volatility. If you would invest 528.00 in WHA Utilities and on September 2, 2024 and sell it today you would lose (54.00) from holding WHA Utilities and or give up 10.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wave Entertainment Public vs. WHA Utilities and
Performance |
| Timeline |
| Wave Entertainment Public |
| WHA Utilities |
Wave Entertainment and WHA Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wave Entertainment and WHA Utilities
The main advantage of trading using opposite Wave Entertainment and WHA Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wave Entertainment 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.| Wave Entertainment vs. Bangkok Chain Hospital | Wave Entertainment vs. Grande Asset Hotels | Wave Entertainment vs. Better World Green | Wave Entertainment vs. Chularat Hospital 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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