Correlation Between Wattanapat Hospital and Alcoa Corp
Can any of the company-specific risk be diversified away by investing in both Wattanapat Hospital and Alcoa Corp 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 Wattanapat Hospital and Alcoa Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wattanapat Hospital Trang and Alcoa Corp, you can compare the effects of market volatilities on Wattanapat Hospital and Alcoa Corp 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 Wattanapat Hospital with a short position of Alcoa Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wattanapat Hospital and Alcoa Corp.
Diversification Opportunities for Wattanapat Hospital and Alcoa Corp
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Wattanapat and Alcoa is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Wattanapat Hospital Trang and Alcoa Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alcoa Corp and Wattanapat Hospital 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 Wattanapat Hospital Trang are associated (or correlated) with Alcoa Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alcoa Corp has no effect on the direction of Wattanapat Hospital i.e., Wattanapat Hospital and Alcoa Corp go up and down completely randomly.
Pair Corralation between Wattanapat Hospital and Alcoa Corp
Assuming the 90 days trading horizon Wattanapat Hospital is expected to generate 4.51 times less return on investment than Alcoa Corp. But when comparing it to its historical volatility, Wattanapat Hospital Trang is 1.0 times less risky than Alcoa Corp. It trades about 0.07 of its potential returns per unit of risk. Alcoa Corp is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 2,967 in Alcoa Corp on January 19, 2024 and sell it today you would earn a total of 588.00 from holding Alcoa Corp or generate 19.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 86.36% |
| Values | Daily Returns |
Wattanapat Hospital Trang vs. Alcoa Corp
Performance |
| Timeline |
| Wattanapat Hospital Trang |
| Alcoa Corp |
Wattanapat Hospital and Alcoa Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wattanapat Hospital and Alcoa Corp
The main advantage of trading using opposite Wattanapat Hospital and Alcoa Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wattanapat Hospital position performs unexpectedly, Alcoa Corp 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 Alcoa Corp will offset losses from the drop in Alcoa Corp's long position.| Wattanapat Hospital vs. Vibhavadi Medical Center | Wattanapat Hospital vs. Ladprao General Hospital | Wattanapat Hospital vs. Ekachai Medical Care | Wattanapat Hospital vs. Chularat Hospital Public |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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