Correlation Between WHA Public and Power Line
Can any of the company-specific risk be diversified away by investing in both WHA Public and Power Line 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 Power Line into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WHA Public and Power Line Engineering, you can compare the effects of market volatilities on WHA Public and Power Line 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 Power Line. Check out your portfolio center. Please also check ongoing floating volatility patterns of WHA Public and Power Line.
Diversification Opportunities for WHA Public and Power Line
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between WHA and Power is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding WHA Public and Power Line Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Line Engineering 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 Power Line. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Line Engineering has no effect on the direction of WHA Public i.e., WHA Public and Power Line go up and down completely randomly.
Pair Corralation between WHA Public and Power Line
Assuming the 90 days trading horizon WHA Public is expected to generate 1.77 times more return on investment than Power Line. However, WHA Public is 1.77 times more volatile than Power Line Engineering. It trades about -0.03 of its potential returns per unit of risk. Power Line Engineering is currently generating about -0.36 per unit of risk. If you would invest 583.00 in WHA Public on September 3, 2024 and sell it today you would lose (13.00) from holding WHA Public or give up 2.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WHA Public vs. Power Line Engineering
Performance |
| Timeline |
| WHA Public |
| Power Line Engineering |
WHA Public and Power Line Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WHA Public and Power Line
The main advantage of trading using opposite WHA Public and Power Line positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WHA Public position performs unexpectedly, Power Line 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 Power Line will offset losses from the drop in Power Line'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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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