Correlation Between Sao Ta and POST TELECOMMU
Can any of the company-specific risk be diversified away by investing in both Sao Ta and POST TELECOMMU 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 Sao Ta and POST TELECOMMU into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sao Ta Foods and POST TELECOMMU, you can compare the effects of market volatilities on Sao Ta and POST TELECOMMU 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 Sao Ta with a short position of POST TELECOMMU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sao Ta and POST TELECOMMU.
Diversification Opportunities for Sao Ta and POST TELECOMMU
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sao and POST is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Sao Ta Foods and POST TELECOMMU in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POST TELECOMMU and Sao Ta 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 Sao Ta Foods are associated (or correlated) with POST TELECOMMU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of POST TELECOMMU has no effect on the direction of Sao Ta i.e., Sao Ta and POST TELECOMMU go up and down completely randomly.
Pair Corralation between Sao Ta and POST TELECOMMU
Assuming the 90 days trading horizon Sao Ta Foods is expected to generate 0.37 times more return on investment than POST TELECOMMU. However, Sao Ta Foods is 2.68 times less risky than POST TELECOMMU. It trades about 0.06 of its potential returns per unit of risk. POST TELECOMMU is currently generating about 0.02 per unit of risk. If you would invest 3,346,981 in Sao Ta Foods on November 7, 2024 and sell it today you would earn a total of 1,363,019 from holding Sao Ta Foods or generate 40.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 85.54% |
| Values | Daily Returns |
Sao Ta Foods vs. POST TELECOMMU
Performance |
| Timeline |
| Sao Ta Foods |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| POST TELECOMMU |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Sao Ta and POST TELECOMMU Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sao Ta and POST TELECOMMU
The main advantage of trading using opposite Sao Ta and POST TELECOMMU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sao Ta position performs unexpectedly, POST TELECOMMU 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 POST TELECOMMU will offset losses from the drop in POST TELECOMMU's long position.The idea behind Sao Ta Foods and POST TELECOMMU 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.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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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