Correlation Between Wattanapat Hospital and Wells Fargo
Can any of the company-specific risk be diversified away by investing in both Wattanapat Hospital and Wells Fargo 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 Wells Fargo 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 Wells Fargo, you can compare the effects of market volatilities on Wattanapat Hospital and Wells Fargo 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 Wells Fargo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wattanapat Hospital and Wells Fargo.
Diversification Opportunities for Wattanapat Hospital and Wells Fargo
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Wattanapat and Wells is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Wattanapat Hospital Trang and Wells Fargo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wells Fargo 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 Wells Fargo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wells Fargo has no effect on the direction of Wattanapat Hospital i.e., Wattanapat Hospital and Wells Fargo go up and down completely randomly.
Pair Corralation between Wattanapat Hospital and Wells Fargo
Assuming the 90 days trading horizon Wattanapat Hospital Trang is expected to under-perform the Wells Fargo. In addition to that, Wattanapat Hospital is 1.97 times more volatile than Wells Fargo. It trades about -0.03 of its total potential returns per unit of risk. Wells Fargo is currently generating about 0.18 per unit of volatility. If you would invest 5,785 in Wells Fargo on January 21, 2024 and sell it today you would earn a total of 250.00 from holding Wells Fargo or generate 4.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 90.48% |
| Values | Daily Returns |
Wattanapat Hospital Trang vs. Wells Fargo
Performance |
| Timeline |
| Wattanapat Hospital Trang |
| Wells Fargo |
Wattanapat Hospital and Wells Fargo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wattanapat Hospital and Wells Fargo
The main advantage of trading using opposite Wattanapat Hospital and Wells Fargo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wattanapat Hospital position performs unexpectedly, Wells Fargo 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 Wells Fargo will offset losses from the drop in Wells Fargo'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 |
| Wells Fargo vs. Bank of America | Wells Fargo vs. JPMorgan Chase Co | Wells Fargo vs. Toronto Dominion Bank | Wells Fargo vs. Nu Holdings |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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