Correlation Between K W and Patrangsit Healthcare

Can any of the company-specific risk be diversified away by investing in both K W and Patrangsit Healthcare 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 K W and Patrangsit Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between K W Metal and Patrangsit Healthcare Group, you can compare the effects of market volatilities on K W and Patrangsit Healthcare 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 K W with a short position of Patrangsit Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of K W and Patrangsit Healthcare.

Diversification Opportunities for K W and Patrangsit Healthcare

0.48

Correlation Coefficient

K W  Patrangsit Healthcare

Very weak diversification

The 3 months correlation between KWM and Patrangsit is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding K W Metal and Patrangsit Healthcare Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Patrangsit Healthcare and K W 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 K W Metal are associated (or correlated) with Patrangsit Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Patrangsit Healthcare has no effect on the direction of K W i.e., K W and Patrangsit Healthcare go up and down completely randomly.

Pair Corralation between K W and Patrangsit Healthcare

Assuming the 90 days trading horizon K W is expected to generate 1.39 times less return on investment than Patrangsit Healthcare. But when comparing it to its historical volatility, K W Metal is 1.14 times less risky than Patrangsit Healthcare. It trades about 0.04 of its potential returns per unit of risk. Patrangsit Healthcare Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,568  in Patrangsit Healthcare Group on October 11, 2024 and sell it today you would lose (28.00) from holding Patrangsit Healthcare Group or give up 1.79% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	76.88%
Values	Daily Returns

K W Metal  vs.  Patrangsit Healthcare Group

K W Metal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days K W Metal has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's primary indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Patrangsit Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Patrangsit Healthcare Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Patrangsit Healthcare is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with K W and Patrangsit Healthcare

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

The idea behind K W Metal and Patrangsit Healthcare Group 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.