Correlation Between Stock Exchange and Namwiwat Medical

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

By analyzing existing cross correlation between Stock Exchange Of and Namwiwat Medical, you can compare the effects of market volatilities on Stock Exchange and Namwiwat 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 Stock Exchange with a short position of Namwiwat Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stock Exchange and Namwiwat Medical.

Diversification Opportunities for Stock Exchange and Namwiwat Medical

0.52

Correlation Coefficient

Stock Exchange  Namwiwat Medical

Very weak diversification

The 3 months correlation between Stock and Namwiwat is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Stock Exchange Of and Namwiwat Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Namwiwat Medical and Stock Exchange 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 Stock Exchange Of are associated (or correlated) with Namwiwat Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Namwiwat Medical has no effect on the direction of Stock Exchange i.e., Stock Exchange and Namwiwat Medical go up and down completely randomly.

Pair Corralation between Stock Exchange and Namwiwat Medical

Assuming the 90 days trading horizon Stock Exchange Of is expected to under-perform the Namwiwat Medical. But the index apears to be less risky and, when comparing its historical volatility, Stock Exchange Of is 1.44 times less risky than Namwiwat Medical. The index trades about -0.26 of its potential returns per unit of risk. The Namwiwat Medical is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  444.00  in Namwiwat Medical on December 30, 2024 and sell it today you would lose (18.00) from holding Namwiwat Medical or give up 4.05% of portfolio value over 90 days.

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

Stock Exchange Of  vs.  Namwiwat Medical

Pair Trading with Stock Exchange and Namwiwat Medical

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

The idea behind Stock Exchange Of and Namwiwat Medical 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.