Correlation Between CH Karnchang and WHA Public

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

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

Diversification Opportunities for CH Karnchang and WHA Public

-0.3

Correlation Coefficient

CH Karnchang  WHA Public

Very good diversification

The 3 months correlation between CH Karnchang and WHA is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding CH Karnchang Public and WHA Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WHA Public and CH Karnchang 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 CH Karnchang Public are associated (or correlated) with WHA Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WHA Public has no effect on the direction of CH Karnchang i.e., CH Karnchang and WHA Public go up and down completely randomly.

Pair Corralation between CH Karnchang and WHA Public

Assuming the 90 days horizon CH Karnchang Public is expected to under-perform the WHA Public. In addition to that, CH Karnchang is 1.05 times more volatile than WHA Public. It trades about -0.02 of its total potential returns per unit of risk. WHA Public is currently generating about 0.05 per unit of volatility. If you would invest  374.00  in WHA Public on September 26, 2024 and sell it today you would earn a total of  161.00  from holding WHA Public or generate 43.05% return on investment over 90 days.

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

CH Karnchang Public  vs.  WHA Public

CH Karnchang Public

Risk-Adjusted Performance

0 of 100

Very Weak

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

WHA Public

Risk-Adjusted Performance

0 of 100

Weak

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

Pair Trading with CH Karnchang and WHA Public

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

The idea behind CH Karnchang Public and WHA Public 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.

Check out your portfolio center.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.