Correlation Between Wattanapat Hospital and Home Depot

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Can any of the company-specific risk be diversified away by investing in both Wattanapat Hospital and Home Depot 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 Home Depot 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 Home Depot, you can compare the effects of market volatilities on Wattanapat Hospital and Home Depot 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 Home Depot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wattanapat Hospital and Home Depot.

Diversification Opportunities for Wattanapat Hospital and Home Depot

0.5
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Wattanapat and Home is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Wattanapat Hospital Trang and Home Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Depot 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 Home Depot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Depot has no effect on the direction of Wattanapat Hospital i.e., Wattanapat Hospital and Home Depot go up and down completely randomly.

Pair Corralation between Wattanapat Hospital and Home Depot

Assuming the 90 days trading horizon Wattanapat Hospital Trang is expected to generate 3.02 times more return on investment than Home Depot. However, Wattanapat Hospital is 3.02 times more volatile than Home Depot. It trades about 0.12 of its potential returns per unit of risk. Home Depot is currently generating about 0.16 per unit of risk. If you would invest  667.00  in Wattanapat Hospital Trang on December 29, 2023 and sell it today you would earn a total of  173.00  from holding Wattanapat Hospital Trang or generate 25.94% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Wattanapat Hospital Trang  vs.  Home Depot

 Performance 
       Timeline  
Wattanapat Hospital Trang 

Risk-Adjusted Performance

9 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Wattanapat Hospital Trang are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite weak technical indicators, Wattanapat Hospital disclosed solid returns over the last few months and may actually be approaching a breakup point.
Home Depot 

Risk-Adjusted Performance

12 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Home Depot are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental indicators, Home Depot may actually be approaching a critical reversion point that can send shares even higher in April 2024.

Wattanapat Hospital and Home Depot Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Wattanapat Hospital and Home Depot

The main advantage of trading using opposite Wattanapat Hospital and Home Depot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wattanapat Hospital position performs unexpectedly, Home Depot 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 Home Depot will offset losses from the drop in Home Depot's long position.
The idea behind Wattanapat Hospital Trang and Home Depot 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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