Correlation Between Aberdeen Global and Wattanapat Hospital

Can any of the company-specific risk be diversified away by investing in both Aberdeen Global and Wattanapat Hospital 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 Aberdeen Global and Wattanapat Hospital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aberdeen Global Premier and Wattanapat Hospital Trang, you can compare the effects of market volatilities on Aberdeen Global and Wattanapat Hospital 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 Aberdeen Global with a short position of Wattanapat Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Global and Wattanapat Hospital.

Diversification Opportunities for Aberdeen Global and Wattanapat Hospital

0.57

Correlation Coefficient

Aberdeen Global  Wattanapat Hospital

Very weak diversification

The 3 months correlation between Aberdeen and Wattanapat is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Global Premier and Wattanapat Hospital Trang in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wattanapat Hospital Trang and Aberdeen Global 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 Aberdeen Global Premier are associated (or correlated) with Wattanapat Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wattanapat Hospital Trang has no effect on the direction of Aberdeen Global i.e., Aberdeen Global and Wattanapat Hospital go up and down completely randomly.

Pair Corralation between Aberdeen Global and Wattanapat Hospital

Considering the 90-day investment horizon Aberdeen Global Premier is expected to under-perform the Wattanapat Hospital. But the fund apears to be less risky and, when comparing its historical volatility, Aberdeen Global Premier is 1.71 times less risky than Wattanapat Hospital. The fund trades about -0.07 of its potential returns per unit of risk. The Wattanapat Hospital Trang is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  850.00  in Wattanapat Hospital Trang on January 31, 2024 and sell it today you would earn a total of  45.00  from holding Wattanapat Hospital Trang or generate 5.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	85.71%
Values	Daily Returns

Aberdeen Global Premier  vs.  Wattanapat Hospital Trang

Aberdeen Global Premier

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aberdeen Global Premier are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. Even with relatively invariable basic indicators, Aberdeen Global is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Wattanapat Hospital Trang

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Wattanapat Hospital Trang are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting technical indicators, Wattanapat Hospital disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aberdeen Global and Wattanapat Hospital

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

The idea behind Aberdeen Global Premier and Wattanapat Hospital Trang 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.