Correlation Between Communication System and Rojana Industrial
Can any of the company-specific risk be diversified away by investing in both Communication System and Rojana Industrial 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 Communication System and Rojana Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Communication System Solution and Rojana Industrial Park, you can compare the effects of market volatilities on Communication System and Rojana Industrial 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 Communication System with a short position of Rojana Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Communication System and Rojana Industrial.
Diversification Opportunities for Communication System and Rojana Industrial
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Communication and Rojana is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Communication System Solution and Rojana Industrial Park in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rojana Industrial Park and Communication System 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 Communication System Solution are associated (or correlated) with Rojana Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rojana Industrial Park has no effect on the direction of Communication System i.e., Communication System and Rojana Industrial go up and down completely randomly.
Pair Corralation between Communication System and Rojana Industrial
Assuming the 90 days trading horizon Communication System Solution is expected to generate 1.19 times more return on investment than Rojana Industrial. However, Communication System is 1.19 times more volatile than Rojana Industrial Park. It trades about -0.01 of its potential returns per unit of risk. Rojana Industrial Park is currently generating about -0.03 per unit of risk. If you would invest 88.00 in Communication System Solution on December 4, 2024 and sell it today you would lose (5.00) from holding Communication System Solution or give up 5.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Communication System Solution vs. Rojana Industrial Park
Performance |
| Timeline |
| Communication System |
| Rojana Industrial Park |
Communication System and Rojana Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Communication System and Rojana Industrial
The main advantage of trading using opposite Communication System and Rojana Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Communication System position performs unexpectedly, Rojana Industrial 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 Rojana Industrial will offset losses from the drop in Rojana Industrial's long position.| Communication System vs. Chularat Hospital Public | Communication System vs. Cal Comp Electronics Public | Communication System vs. Dynasty Ceramic Public | Communication System vs. Forth Public |
| Rojana Industrial vs. Thaifoods Group Public | Rojana Industrial vs. Patrangsit Healthcare Group | Rojana Industrial vs. Wattanapat Hospital Trang | Rojana Industrial vs. Chiangmai Frozen Foods |
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 CEOs Directory module to screen CEOs from public companies around the world.
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