Correlation Between Wenzhou Kangning and Banpu PCL

Can any of the company-specific risk be diversified away by investing in both Wenzhou Kangning and Banpu PCL 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 Wenzhou Kangning and Banpu PCL into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Wenzhou Kangning and Banpu PCL

0.1

Correlation Coefficient

Wenzhou Kangning  Banpu PCL

Average diversification

The 3 months correlation between Wenzhou and Banpu is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Wenzhou Kangning Hospital and Banpu PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banpu PCL and Wenzhou Kangning 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 Wenzhou Kangning Hospital are associated (or correlated) with Banpu PCL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banpu PCL has no effect on the direction of Wenzhou Kangning i.e., Wenzhou Kangning and Banpu PCL go up and down completely randomly.

Pair Corralation between Wenzhou Kangning and Banpu PCL

Assuming the 90 days trading horizon Wenzhou Kangning Hospital is expected to under-perform the Banpu PCL. But the stock apears to be less risky and, when comparing its historical volatility, Wenzhou Kangning Hospital is 3.98 times less risky than Banpu PCL. The stock trades about -0.13 of its potential returns per unit of risk. The Banpu PCL is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  16.00  in Banpu PCL on October 26, 2024 and sell it today you would lose (2.00) from holding Banpu PCL or give up 12.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Wenzhou Kangning Hospital  vs.  Banpu PCL

Wenzhou Kangning Hospital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wenzhou Kangning Hospital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Banpu PCL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Banpu PCL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Banpu PCL is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Wenzhou Kangning and Banpu PCL

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

The idea behind Wenzhou Kangning Hospital and Banpu PCL 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.