Correlation Between CENTRAL RETAIL and Somboon Advance
Can any of the company-specific risk be diversified away by investing in both CENTRAL RETAIL and Somboon Advance 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 CENTRAL RETAIL and Somboon Advance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CENTRAL RETAIL P and Somboon Advance Technology, you can compare the effects of market volatilities on CENTRAL RETAIL and Somboon Advance 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 CENTRAL RETAIL with a short position of Somboon Advance. Check out your portfolio center. Please also check ongoing floating volatility patterns of CENTRAL RETAIL and Somboon Advance.
Diversification Opportunities for CENTRAL RETAIL and Somboon Advance
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CENTRAL and Somboon is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding CENTRAL RETAIL P and Somboon Advance Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Somboon Advance Tech and CENTRAL RETAIL 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 CENTRAL RETAIL P are associated (or correlated) with Somboon Advance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Somboon Advance Tech has no effect on the direction of CENTRAL RETAIL i.e., CENTRAL RETAIL and Somboon Advance go up and down completely randomly.
Pair Corralation between CENTRAL RETAIL and Somboon Advance
Assuming the 90 days trading horizon CENTRAL RETAIL P is expected to generate 0.72 times more return on investment than Somboon Advance. However, CENTRAL RETAIL P is 1.39 times less risky than Somboon Advance. It trades about -0.09 of its potential returns per unit of risk. Somboon Advance Technology is currently generating about -0.11 per unit of risk. If you would invest 3,925 in CENTRAL RETAIL P on September 3, 2024 and sell it today you would lose (575.00) from holding CENTRAL RETAIL P or give up 14.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CENTRAL RETAIL P vs. Somboon Advance Technology
Performance |
| Timeline |
| CENTRAL RETAIL P |
| Somboon Advance Tech |
CENTRAL RETAIL and Somboon Advance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CENTRAL RETAIL and Somboon Advance
The main advantage of trading using opposite CENTRAL RETAIL and Somboon Advance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CENTRAL RETAIL position performs unexpectedly, Somboon Advance 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 Somboon Advance will offset losses from the drop in Somboon Advance's long position.| CENTRAL RETAIL vs. Central Retail | CENTRAL RETAIL vs. The Erawan Group | CENTRAL RETAIL vs. Autocorp Holding Public | CENTRAL RETAIL vs. XSpring Capital Public |
| Somboon Advance vs. AAPICO Hitech Public | Somboon Advance vs. Thai Stanley Electric | Somboon Advance vs. Hana Microelectronics Public | Somboon Advance vs. TISCO Financial Group |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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