Correlation Between WHA Public and Bangkok Expressway
Can any of the company-specific risk be diversified away by investing in both WHA Public and Bangkok Expressway 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 WHA Public and Bangkok Expressway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WHA Public and Bangkok Expressway and, you can compare the effects of market volatilities on WHA Public and Bangkok Expressway 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 WHA Public with a short position of Bangkok Expressway. Check out your portfolio center. Please also check ongoing floating volatility patterns of WHA Public and Bangkok Expressway.
Diversification Opportunities for WHA Public and Bangkok Expressway
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between WHA and Bangkok is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding WHA Public and Bangkok Expressway and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangkok Expressway and and WHA Public 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 WHA Public are associated (or correlated) with Bangkok Expressway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangkok Expressway and has no effect on the direction of WHA Public i.e., WHA Public and Bangkok Expressway go up and down completely randomly.
Pair Corralation between WHA Public and Bangkok Expressway
Assuming the 90 days trading horizon WHA Public is expected to generate 2.34 times more return on investment than Bangkok Expressway. However, WHA Public is 2.34 times more volatile than Bangkok Expressway and. It trades about -0.02 of its potential returns per unit of risk. Bangkok Expressway and is currently generating about -0.33 per unit of risk. If you would invest 578.00 in WHA Public on August 29, 2024 and sell it today you would lose (8.00) from holding WHA Public or give up 1.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WHA Public vs. Bangkok Expressway and
Performance |
| Timeline |
| WHA Public |
| Bangkok Expressway and |
WHA Public and Bangkok Expressway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WHA Public and Bangkok Expressway
The main advantage of trading using opposite WHA Public and Bangkok Expressway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WHA Public position performs unexpectedly, Bangkok Expressway 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 Bangkok Expressway will offset losses from the drop in Bangkok Expressway's long position.The idea behind WHA Public and Bangkok Expressway and 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.| Bangkok Expressway vs. Tata Steel Public | Bangkok Expressway vs. Thaifoods Group Public | Bangkok Expressway vs. TMT Steel Public | Bangkok Expressway vs. The Erawan Group |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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