Correlation Between WHA Industrial and PINTHONG INDUSTRIAL

Can any of the company-specific risk be diversified away by investing in both WHA Industrial and PINTHONG INDUSTRIAL 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 WHA Industrial and PINTHONG INDUSTRIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between WHA Industrial Leasehold and PINTHONG INDUSTRIAL PARK, you can compare the effects of market volatilities on WHA Industrial and PINTHONG INDUSTRIAL 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 WHA Industrial with a short position of PINTHONG INDUSTRIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of WHA Industrial and PINTHONG INDUSTRIAL.

Diversification Opportunities for WHA Industrial and PINTHONG INDUSTRIAL

0.8

Correlation Coefficient

WHA Industrial  PINTHONG INDUSTRIAL

Very poor diversification

The 3 months correlation between WHA and PINTHONG is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding WHA Industrial Leasehold and PINTHONG INDUSTRIAL PARK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PINTHONG INDUSTRIAL PARK and WHA Industrial 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 WHA Industrial Leasehold are associated (or correlated) with PINTHONG INDUSTRIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PINTHONG INDUSTRIAL PARK has no effect on the direction of WHA Industrial i.e., WHA Industrial and PINTHONG INDUSTRIAL go up and down completely randomly.

Pair Corralation between WHA Industrial and PINTHONG INDUSTRIAL

Assuming the 90 days trading horizon WHA Industrial is expected to generate 1.95 times less return on investment than PINTHONG INDUSTRIAL. But when comparing it to its historical volatility, WHA Industrial Leasehold is 3.39 times less risky than PINTHONG INDUSTRIAL. It trades about 0.23 of its potential returns per unit of risk. PINTHONG INDUSTRIAL PARK is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  478.00  in PINTHONG INDUSTRIAL PARK on September 3, 2024 and sell it today you would earn a total of  152.00  from holding PINTHONG INDUSTRIAL PARK or generate 31.8% return on investment over 90 days.

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

WHA Industrial Leasehold  vs.  PINTHONG INDUSTRIAL PARK

WHA Industrial Leasehold

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in WHA Industrial Leasehold are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, WHA Industrial sustained solid returns over the last few months and may actually be approaching a breakup point.

PINTHONG INDUSTRIAL PARK

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PINTHONG INDUSTRIAL PARK are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, PINTHONG INDUSTRIAL disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with WHA Industrial and PINTHONG INDUSTRIAL

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

The idea behind WHA Industrial Leasehold and PINTHONG INDUSTRIAL PARK 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.