Correlation Between WHA Public and Home Product
Can any of the company-specific risk be diversified away by investing in both WHA Public and Home Product 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 Home Product into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WHA Public and Home Product Center, you can compare the effects of market volatilities on WHA Public and Home Product 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 Home Product. Check out your portfolio center. Please also check ongoing floating volatility patterns of WHA Public and Home Product.
Diversification Opportunities for WHA Public and Home Product
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between WHA and Home is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding WHA Public and Home Product Center in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Product Center 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 Home Product. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Product Center has no effect on the direction of WHA Public i.e., WHA Public and Home Product go up and down completely randomly.
Pair Corralation between WHA Public and Home Product
Assuming the 90 days trading horizon WHA Public is expected to under-perform the Home Product. In addition to that, WHA Public is 1.3 times more volatile than Home Product Center. It trades about -0.02 of its total potential returns per unit of risk. Home Product Center is currently generating about 0.05 per unit of volatility. If you would invest 950.00 in Home Product Center on August 29, 2024 and sell it today you would earn a total of 15.00 from holding Home Product Center or generate 1.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WHA Public vs. Home Product Center
Performance |
| Timeline |
| WHA Public |
| Home Product Center |
WHA Public and Home Product Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WHA Public and Home Product
The main advantage of trading using opposite WHA Public and Home Product positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WHA Public position performs unexpectedly, Home Product 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 Home Product will offset losses from the drop in Home Product's long position.The idea behind WHA Public and Home Product Center 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.| Home Product vs. SCB X Public | Home Product vs. Kasikornbank Public | Home Product vs. PTT Public | Home Product vs. Kasikornbank 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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