Correlation Between WHA Public and Eastern Power
Can any of the company-specific risk be diversified away by investing in both WHA Public and Eastern Power 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 Eastern Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WHA Public and Eastern Power Group, you can compare the effects of market volatilities on WHA Public and Eastern Power 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 Eastern Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of WHA Public and Eastern Power.
Diversification Opportunities for WHA Public and Eastern Power
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between WHA and Eastern is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding WHA Public and Eastern Power Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Power Group 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 Eastern Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Power Group has no effect on the direction of WHA Public i.e., WHA Public and Eastern Power go up and down completely randomly.
Pair Corralation between WHA Public and Eastern Power
Assuming the 90 days trading horizon WHA Public is expected to generate 1.28 times more return on investment than Eastern Power. However, WHA Public is 1.28 times more volatile than Eastern Power Group. It trades about -0.15 of its potential returns per unit of risk. Eastern Power Group is currently generating about -0.36 per unit of risk. If you would invest 535.00 in WHA Public on October 26, 2024 and sell it today you would lose (35.00) from holding WHA Public or give up 6.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WHA Public vs. Eastern Power Group
Performance |
| Timeline |
| WHA Public |
| Eastern Power Group |
WHA Public and Eastern Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WHA Public and Eastern Power
The main advantage of trading using opposite WHA Public and Eastern Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WHA Public position performs unexpectedly, Eastern Power 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 Eastern Power will offset losses from the drop in Eastern Power's long position.| WHA Public vs. Bangkok Dusit Medical | WHA Public vs. Land and Houses | WHA Public vs. BTS Group Holdings | WHA Public vs. Bangkok Expressway and |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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