Correlation Between IRPC Public and Namyong Terminal
Can any of the company-specific risk be diversified away by investing in both IRPC Public and Namyong Terminal 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 IRPC Public and Namyong Terminal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IRPC Public and Namyong Terminal PCL, you can compare the effects of market volatilities on IRPC Public and Namyong Terminal 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 IRPC Public with a short position of Namyong Terminal. Check out your portfolio center. Please also check ongoing floating volatility patterns of IRPC Public and Namyong Terminal.
Diversification Opportunities for IRPC Public and Namyong Terminal
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IRPC and Namyong is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding IRPC Public and Namyong Terminal PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Namyong Terminal PCL and IRPC Public 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 IRPC Public are associated (or correlated) with Namyong Terminal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Namyong Terminal PCL has no effect on the direction of IRPC Public i.e., IRPC Public and Namyong Terminal go up and down completely randomly.
Pair Corralation between IRPC Public and Namyong Terminal
Assuming the 90 days trading horizon IRPC Public is expected to under-perform the Namyong Terminal. In addition to that, IRPC Public is 1.68 times more volatile than Namyong Terminal PCL. It trades about -0.2 of its total potential returns per unit of risk. Namyong Terminal PCL is currently generating about -0.31 per unit of volatility. If you would invest 302.00 in Namyong Terminal PCL on August 28, 2024 and sell it today you would lose (22.00) from holding Namyong Terminal PCL or give up 7.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IRPC Public vs. Namyong Terminal PCL
Performance |
| Timeline |
| IRPC Public |
| Namyong Terminal PCL |
IRPC Public and Namyong Terminal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IRPC Public and Namyong Terminal
The main advantage of trading using opposite IRPC Public and Namyong Terminal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IRPC Public position performs unexpectedly, Namyong Terminal 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 Namyong Terminal will offset losses from the drop in Namyong Terminal's long position.The idea behind IRPC Public and Namyong Terminal PCL 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.| Namyong Terminal vs. Tata Steel Public | Namyong Terminal vs. Thaifoods Group Public | Namyong Terminal vs. TMT Steel Public | Namyong Terminal vs. The Erawan 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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