Correlation Between AEON Thana and SRI TRANG

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Can any of the company-specific risk be diversified away by investing in both AEON Thana and SRI TRANG 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 AEON Thana and SRI TRANG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AEON Thana Sinsap and SRI TRANG GLOVES, you can compare the effects of market volatilities on AEON Thana and SRI TRANG 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 AEON Thana with a short position of SRI TRANG. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEON Thana and SRI TRANG.

Diversification Opportunities for AEON Thana and SRI TRANG

-0.17
  Correlation Coefficient

Good diversification

The 3 months correlation between AEON and SRI is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding AEON Thana Sinsap and SRI TRANG GLOVES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SRI TRANG GLOVES and AEON Thana 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 AEON Thana Sinsap are associated (or correlated) with SRI TRANG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SRI TRANG GLOVES has no effect on the direction of AEON Thana i.e., AEON Thana and SRI TRANG go up and down completely randomly.

Pair Corralation between AEON Thana and SRI TRANG

Assuming the 90 days trading horizon AEON Thana Sinsap is expected to generate 37.21 times more return on investment than SRI TRANG. However, AEON Thana is 37.21 times more volatile than SRI TRANG GLOVES. It trades about 0.22 of its potential returns per unit of risk. SRI TRANG GLOVES is currently generating about 0.27 per unit of risk. If you would invest  16,575  in AEON Thana Sinsap on September 5, 2024 and sell it today you would lose (4,075) from holding AEON Thana Sinsap or give up 24.59% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy69.57%
ValuesDaily Returns

AEON Thana Sinsap  vs.  SRI TRANG GLOVES

 Performance 
       Timeline  
AEON Thana Sinsap 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Good
Over the last 90 days AEON Thana Sinsap has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat conflicting basic indicators, AEON Thana sustained solid returns over the last few months and may actually be approaching a breakup point.
SRI TRANG GLOVES 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in SRI TRANG GLOVES are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, SRI TRANG sustained solid returns over the last few months and may actually be approaching a breakup point.

AEON Thana and SRI TRANG Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with AEON Thana and SRI TRANG

The main advantage of trading using opposite AEON Thana and SRI TRANG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEON Thana position performs unexpectedly, SRI TRANG 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 SRI TRANG will offset losses from the drop in SRI TRANG's long position.
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The idea behind AEON Thana Sinsap and SRI TRANG GLOVES 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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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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