Correlation Between GMM Grammy and SCB X
Can any of the company-specific risk be diversified away by investing in both GMM Grammy and SCB X 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 GMM Grammy and SCB X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GMM Grammy Public and SCB X Public, you can compare the effects of market volatilities on GMM Grammy and SCB X 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 GMM Grammy with a short position of SCB X. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMM Grammy and SCB X.
Diversification Opportunities for GMM Grammy and SCB X
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GMM and SCB is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding GMM Grammy Public and SCB X Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCB X Public and GMM Grammy 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 GMM Grammy Public are associated (or correlated) with SCB X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCB X Public has no effect on the direction of GMM Grammy i.e., GMM Grammy and SCB X go up and down completely randomly.
Pair Corralation between GMM Grammy and SCB X
Assuming the 90 days trading horizon GMM Grammy Public is expected to under-perform the SCB X. In addition to that, GMM Grammy is 1.68 times more volatile than SCB X Public. It trades about -0.16 of its total potential returns per unit of risk. SCB X Public is currently generating about 0.13 per unit of volatility. If you would invest 11,200 in SCB X Public on August 31, 2024 and sell it today you would earn a total of 200.00 from holding SCB X Public or generate 1.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GMM Grammy Public vs. SCB X Public
Performance |
| Timeline |
| GMM Grammy Public |
| SCB X Public |
GMM Grammy and SCB X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GMM Grammy and SCB X
The main advantage of trading using opposite GMM Grammy and SCB X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GMM Grammy position performs unexpectedly, SCB X 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 SCB X will offset losses from the drop in SCB X's long position.| GMM Grammy vs. Warrix Sport PCL | GMM Grammy vs. PINTHONG INDUSTRIAL PARK | GMM Grammy vs. Exotic Food Public | GMM Grammy vs. WHA Industrial Leasehold |
| SCB X vs. Bangkok Dusit Medical | SCB X vs. Bank of Ayudhya | SCB X vs. KTBST Mixed Leasehold | SCB X 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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