Correlation Between Wizz Air and TMBThanachart Bank
Can any of the company-specific risk be diversified away by investing in both Wizz Air and TMBThanachart Bank 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 Wizz Air and TMBThanachart Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wizz Air Holdings and TMBThanachart Bank Public, you can compare the effects of market volatilities on Wizz Air and TMBThanachart Bank 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 Wizz Air with a short position of TMBThanachart Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wizz Air and TMBThanachart Bank.
Diversification Opportunities for Wizz Air and TMBThanachart Bank
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wizz and TMBThanachart is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Wizz Air Holdings and TMBThanachart Bank Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TMBThanachart Bank Public and Wizz Air 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 Wizz Air Holdings are associated (or correlated) with TMBThanachart Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TMBThanachart Bank Public has no effect on the direction of Wizz Air i.e., Wizz Air and TMBThanachart Bank go up and down completely randomly.
Pair Corralation between Wizz Air and TMBThanachart Bank
Assuming the 90 days trading horizon Wizz Air Holdings is expected to under-perform the TMBThanachart Bank. In addition to that, Wizz Air is 2.13 times more volatile than TMBThanachart Bank Public. It trades about -0.02 of its total potential returns per unit of risk. TMBThanachart Bank Public is currently generating about 0.04 per unit of volatility. If you would invest 3.55 in TMBThanachart Bank Public on September 3, 2024 and sell it today you would earn a total of 1.15 from holding TMBThanachart Bank Public or generate 32.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wizz Air Holdings vs. TMBThanachart Bank Public
Performance |
| Timeline |
| Wizz Air Holdings |
| TMBThanachart Bank Public |
Wizz Air and TMBThanachart Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wizz Air and TMBThanachart Bank
The main advantage of trading using opposite Wizz Air and TMBThanachart Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wizz Air position performs unexpectedly, TMBThanachart Bank 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 TMBThanachart Bank will offset losses from the drop in TMBThanachart Bank's long position.The idea behind Wizz Air Holdings and TMBThanachart Bank Public 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.| TMBThanachart Bank vs. CVS Health | TMBThanachart Bank vs. EPSILON HEALTHCARE LTD | TMBThanachart Bank vs. Liberty Broadband | TMBThanachart Bank vs. Gold Road Resources |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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