Correlation Between Wave Entertainment and Yong Concrete
Can any of the company-specific risk be diversified away by investing in both Wave Entertainment and Yong Concrete 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 Yong Concrete 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 Yong Concrete PCL, you can compare the effects of market volatilities on Wave Entertainment and Yong Concrete 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 Yong Concrete. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wave Entertainment and Yong Concrete.
Diversification Opportunities for Wave Entertainment and Yong Concrete
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wave and Yong is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Wave Entertainment Public and Yong Concrete PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yong Concrete PCL 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 Yong Concrete. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yong Concrete PCL has no effect on the direction of Wave Entertainment i.e., Wave Entertainment and Yong Concrete go up and down completely randomly.
Pair Corralation between Wave Entertainment and Yong Concrete
Assuming the 90 days trading horizon Wave Entertainment Public is expected to under-perform the Yong Concrete. In addition to that, Wave Entertainment is 2.17 times more volatile than Yong Concrete PCL. It trades about -0.11 of its total potential returns per unit of risk. Yong Concrete PCL is currently generating about -0.22 per unit of volatility. If you would invest 139.00 in Yong Concrete PCL on September 1, 2024 and sell it today you would lose (17.00) from holding Yong Concrete PCL or give up 12.23% 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. Yong Concrete PCL
Performance |
| Timeline |
| Wave Entertainment Public |
| Yong Concrete PCL |
Wave Entertainment and Yong Concrete Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wave Entertainment and Yong Concrete
The main advantage of trading using opposite Wave Entertainment and Yong Concrete positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wave Entertainment position performs unexpectedly, Yong Concrete 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 Yong Concrete will offset losses from the drop in Yong Concrete's long position.| Wave Entertainment vs. Vibhavadi Medical Center | Wave Entertainment vs. TWZ Public | Wave Entertainment vs. VGI Public | Wave Entertainment vs. Aqua Public |
| Yong Concrete vs. Exotic Food Public | Yong Concrete vs. Knight Club Capital | Yong Concrete vs. North East Rubbers | Yong Concrete vs. Yggdrazil Group 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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