Correlation Between WHA Utilities and Central Retail
Can any of the company-specific risk be diversified away by investing in both WHA Utilities and Central Retail 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 Utilities and Central Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WHA Utilities and and Central Retail, you can compare the effects of market volatilities on WHA Utilities and Central Retail 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 Utilities with a short position of Central Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of WHA Utilities and Central Retail.
Diversification Opportunities for WHA Utilities and Central Retail
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WHA and Central is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding WHA Utilities and and Central Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Retail and WHA Utilities 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 Utilities and are associated (or correlated) with Central Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Retail has no effect on the direction of WHA Utilities i.e., WHA Utilities and Central Retail go up and down completely randomly.
Pair Corralation between WHA Utilities and Central Retail
Assuming the 90 days trading horizon WHA Utilities and is expected to under-perform the Central Retail. In addition to that, WHA Utilities is 1.11 times more volatile than Central Retail. It trades about -0.44 of its total potential returns per unit of risk. Central Retail is currently generating about 0.04 per unit of volatility. If you would invest 3,400 in Central Retail on October 20, 2024 and sell it today you would earn a total of 50.00 from holding Central Retail or generate 1.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
WHA Utilities and vs. Central Retail
Performance |
| Timeline |
| WHA Utilities |
| Central Retail |
WHA Utilities and Central Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WHA Utilities and Central Retail
The main advantage of trading using opposite WHA Utilities and Central Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WHA Utilities position performs unexpectedly, Central Retail 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 Central Retail will offset losses from the drop in Central Retail's long position.| WHA Utilities vs. WHA Public | WHA Utilities vs. Global Power Synergy | WHA Utilities vs. TPI Polene Power | WHA Utilities vs. Bangkok Expressway and |
| Central Retail vs. Moshi Moshi Retail | Central Retail vs. Ekarat Engineering Public | Central Retail vs. VGI Public | Central Retail 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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