Correlation Between Wattanapat Hospital and True Public

Can any of the company-specific risk be diversified away by investing in both Wattanapat Hospital and True Public 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 Wattanapat Hospital and True Public into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Wattanapat Hospital Trang and True Public, you can compare the effects of market volatilities on Wattanapat Hospital and True Public 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 Wattanapat Hospital with a short position of True Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wattanapat Hospital and True Public.

Diversification Opportunities for Wattanapat Hospital and True Public

0.9

Correlation Coefficient

Wattanapat Hospital  True Public

Almost no diversification

The 3 months correlation between Wattanapat and True is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Wattanapat Hospital Trang and True Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on True Public and Wattanapat Hospital 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 Wattanapat Hospital Trang are associated (or correlated) with True Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of True Public has no effect on the direction of Wattanapat Hospital i.e., Wattanapat Hospital and True Public go up and down completely randomly.

Pair Corralation between Wattanapat Hospital and True Public

Assuming the 90 days trading horizon Wattanapat Hospital Trang is expected to generate 1.18 times more return on investment than True Public. However, Wattanapat Hospital is 1.18 times more volatile than True Public. It trades about 0.04 of its potential returns per unit of risk. True Public is currently generating about -0.01 per unit of risk. If you would invest  800.00  in Wattanapat Hospital Trang on January 24, 2024 and sell it today you would earn a total of  10.00  from holding Wattanapat Hospital Trang or generate 1.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	94.44%
Values	Daily Returns

Wattanapat Hospital Trang  vs.  True Public

Wattanapat Hospital Trang

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Wattanapat Hospital Trang are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite weak technical indicators, Wattanapat Hospital disclosed solid returns over the last few months and may actually be approaching a breakup point.

True Public

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in True Public are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, True Public disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wattanapat Hospital and True Public

The main advantage of trading using opposite Wattanapat Hospital and True Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wattanapat Hospital position performs unexpectedly, True Public 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 True Public will offset losses from the drop in True Public's long position.

The idea behind Wattanapat Hospital Trang and True 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.

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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.