Correlation Between Wattana Karnpaet and Ekachai Medical

Can any of the company-specific risk be diversified away by investing in both Wattana Karnpaet and Ekachai Medical 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 Wattana Karnpaet and Ekachai Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Wattana Karnpaet and Ekachai Medical

-0.6

Correlation Coefficient

Wattana Karnpaet  Ekachai Medical

Excellent diversification

The 3 months correlation between Wattana and Ekachai is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Wattana Karnpaet Public and Ekachai Medical Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ekachai Medical Care and Wattana Karnpaet 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 Wattana Karnpaet Public are associated (or correlated) with Ekachai Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ekachai Medical Care has no effect on the direction of Wattana Karnpaet i.e., Wattana Karnpaet and Ekachai Medical go up and down completely randomly.

Pair Corralation between Wattana Karnpaet and Ekachai Medical

Assuming the 90 days trading horizon Wattana Karnpaet Public is expected to generate 5.65 times more return on investment than Ekachai Medical. However, Wattana Karnpaet is 5.65 times more volatile than Ekachai Medical Care. It trades about 0.16 of its potential returns per unit of risk. Ekachai Medical Care is currently generating about -0.14 per unit of risk. If you would invest  6,225  in Wattana Karnpaet Public on October 9, 2024 and sell it today you would earn a total of  3,775  from holding Wattana Karnpaet Public or generate 60.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.31%
Values	Daily Returns

Wattana Karnpaet Public  vs.  Ekachai Medical Care

Wattana Karnpaet Public

Risk-Adjusted Performance

12 of 100

Good

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

Ekachai Medical Care

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Wattana Karnpaet and Ekachai Medical

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

The idea behind Wattana Karnpaet Public and Ekachai Medical Care 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..