Correlation Between Bangkok Land and WHA Public

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

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

Diversification Opportunities for Bangkok Land and WHA Public

0.08

Correlation Coefficient

Bangkok Land  WHA Public

Significant diversification

The 3 months correlation between Bangkok and WHA is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Land Public and WHA Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WHA Public and Bangkok Land 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 Bangkok Land Public are associated (or correlated) with WHA Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WHA Public has no effect on the direction of Bangkok Land i.e., Bangkok Land and WHA Public go up and down completely randomly.

Pair Corralation between Bangkok Land and WHA Public

Assuming the 90 days trading horizon Bangkok Land Public is expected to generate 62.74 times more return on investment than WHA Public. However, Bangkok Land is 62.74 times more volatile than WHA Public. It trades about 0.13 of its potential returns per unit of risk. WHA Public is currently generating about 0.08 per unit of risk. If you would invest  0.00  in Bangkok Land Public on September 3, 2024 and sell it today you would earn a total of  60.00  from holding Bangkok Land Public or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Bangkok Land Public  vs.  WHA Public

Bangkok Land Public

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bangkok Land Public are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, Bangkok Land sustained solid returns over the last few months and may actually be approaching a breakup point.

WHA Public

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in WHA Public are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, WHA Public may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Bangkok Land and WHA Public

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

The idea behind Bangkok Land Public and WHA 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.