Correlation Between GM and Wattanapat Hospital
Can any of the company-specific risk be diversified away by investing in both GM and Wattanapat Hospital 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 GM and Wattanapat Hospital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Wattanapat Hospital Trang, you can compare the effects of market volatilities on GM and Wattanapat Hospital 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 GM with a short position of Wattanapat Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Wattanapat Hospital.
Diversification Opportunities for GM and Wattanapat Hospital
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GM and Wattanapat is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Wattanapat Hospital Trang in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wattanapat Hospital Trang and GM 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 General Motors are associated (or correlated) with Wattanapat Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wattanapat Hospital Trang has no effect on the direction of GM i.e., GM and Wattanapat Hospital go up and down completely randomly.
Pair Corralation between GM and Wattanapat Hospital
Allowing for the 90-day total investment horizon General Motors is expected to under-perform the Wattanapat Hospital. But the stock apears to be less risky and, when comparing its historical volatility, General Motors is 1.03 times less risky than Wattanapat Hospital. The stock trades about -0.08 of its potential returns per unit of risk. The Wattanapat Hospital Trang is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 940.00 in Wattanapat Hospital Trang on December 4, 2024 and sell it today you would lose (95.00) from holding Wattanapat Hospital Trang or give up 10.11% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
General Motors vs. Wattanapat Hospital Trang
Performance |
Timeline |
General Motors |
Wattanapat Hospital Trang |
GM and Wattanapat Hospital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GM and Wattanapat Hospital
The main advantage of trading using opposite GM and Wattanapat Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Wattanapat Hospital 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 Wattanapat Hospital will offset losses from the drop in Wattanapat Hospital's long position.The idea behind General Motors and Wattanapat Hospital Trang 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.Wattanapat Hospital vs. Vibhavadi Medical Center | Wattanapat Hospital vs. Ladprao General Hospital | Wattanapat Hospital vs. Ekachai Medical Care | Wattanapat Hospital vs. Chularat Hospital 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |