Correlation Between WHA Public and Sahamit Machinery
Can any of the company-specific risk be diversified away by investing in both WHA Public and Sahamit Machinery 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 Sahamit Machinery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WHA Public and Sahamit Machinery Public, you can compare the effects of market volatilities on WHA Public and Sahamit Machinery 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 Sahamit Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of WHA Public and Sahamit Machinery.
Diversification Opportunities for WHA Public and Sahamit Machinery
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between WHA and Sahamit is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding WHA Public and Sahamit Machinery Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sahamit Machinery Public 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 Sahamit Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sahamit Machinery Public has no effect on the direction of WHA Public i.e., WHA Public and Sahamit Machinery go up and down completely randomly.
Pair Corralation between WHA Public and Sahamit Machinery
Assuming the 90 days trading horizon WHA Public is expected to under-perform the Sahamit Machinery. In addition to that, WHA Public is 3.53 times more volatile than Sahamit Machinery Public. It trades about -0.02 of its total potential returns per unit of risk. Sahamit Machinery Public is currently generating about 0.11 per unit of volatility. If you would invest 400.00 in Sahamit Machinery Public on September 1, 2024 and sell it today you would earn a total of 6.00 from holding Sahamit Machinery Public or generate 1.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WHA Public vs. Sahamit Machinery Public
Performance |
| Timeline |
| WHA Public |
| Sahamit Machinery Public |
WHA Public and Sahamit Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WHA Public and Sahamit Machinery
The main advantage of trading using opposite WHA Public and Sahamit Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WHA Public position performs unexpectedly, Sahamit Machinery 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 Sahamit Machinery will offset losses from the drop in Sahamit Machinery's long position.| WHA Public vs. Land and Houses | WHA Public vs. Bangkok Bank Public | WHA Public vs. Charoen Pokphand Foods |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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