Correlation Between Healthlead Public and Wattanapat Hospital

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

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

Diversification Opportunities for Healthlead Public and Wattanapat Hospital

-0.83

Correlation Coefficient

Healthlead Public  Wattanapat Hospital

Pay attention - limited upside

The 3 months correlation between Healthlead and Wattanapat is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Healthlead Public 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 Healthlead Public 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 Healthlead Public 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 Healthlead Public i.e., Healthlead Public and Wattanapat Hospital go up and down completely randomly.

Pair Corralation between Healthlead Public and Wattanapat Hospital

Assuming the 90 days horizon Healthlead Public is expected to under-perform the Wattanapat Hospital. But the stock apears to be less risky and, when comparing its historical volatility, Healthlead Public is 19.7 times less risky than Wattanapat Hospital. The stock trades about -0.07 of its potential returns per unit of risk. The Wattanapat Hospital Trang is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  378.00  in Wattanapat Hospital Trang on October 11, 2024 and sell it today you would earn a total of  537.00  from holding Wattanapat Hospital Trang or generate 142.06% return on investment over 90 days.

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

Healthlead Public  vs.  Wattanapat Hospital Trang

Healthlead Public

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Healthlead Public are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental drivers, Healthlead Public disclosed solid returns over the last few months and may actually be approaching a breakup point.

Wattanapat Hospital Trang

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wattanapat Hospital Trang has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Healthlead Public and Wattanapat Hospital

The main advantage of trading using opposite Healthlead Public and Wattanapat Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Healthlead Public 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 Healthlead Public 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.

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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.