Correlation Between BEC World and SRI TRANG
Can any of the company-specific risk be diversified away by investing in both BEC World 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 BEC World and SRI TRANG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BEC World Public and SRI TRANG GLOVES, you can compare the effects of market volatilities on BEC World 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 BEC World with a short position of SRI TRANG. Check out your portfolio center. Please also check ongoing floating volatility patterns of BEC World and SRI TRANG.
Diversification Opportunities for BEC World and SRI TRANG
Good diversification
The 3 months correlation between BEC and SRI is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding BEC World Public 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 BEC World 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 BEC World Public 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 BEC World i.e., BEC World and SRI TRANG go up and down completely randomly.
Pair Corralation between BEC World and SRI TRANG
Assuming the 90 days trading horizon BEC World Public is expected to generate 24.54 times more return on investment than SRI TRANG. However, BEC World is 24.54 times more volatile than SRI TRANG GLOVES. It trades about 0.04 of its potential returns per unit of risk. SRI TRANG GLOVES is currently generating about 0.04 per unit of risk. If you would invest 860.00 in BEC World Public on September 4, 2024 and sell it today you would lose (450.00) from holding BEC World Public or give up 52.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BEC World Public vs. SRI TRANG GLOVES
Performance |
| Timeline |
| BEC World Public |
| SRI TRANG GLOVES |
BEC World and SRI TRANG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BEC World and SRI TRANG
The main advantage of trading using opposite BEC World and SRI TRANG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BEC World 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.| BEC World vs. SRI TRANG GLOVES | BEC World vs. AEON Thana Sinsap | BEC World vs. Asian Alliance International | BEC World vs. Sikarin Public |
| SRI TRANG vs. Earth Tech Environment | SRI TRANG vs. Union Petrochemical Public | SRI TRANG vs. Absolute Clean Energy | SRI TRANG vs. SAF Special Steel |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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