Correlation Between Jay Mart and Sri Trang
Can any of the company-specific risk be diversified away by investing in both Jay Mart and Sri Trang 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 Jay Mart and Sri Trang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jay Mart Public and Sri Trang Agro Industry, you can compare the effects of market volatilities on Jay Mart and Sri Trang 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 Jay Mart with a short position of Sri Trang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jay Mart and Sri Trang.
Diversification Opportunities for Jay Mart and Sri Trang
Poor diversification
The 3 months correlation between Jay and Sri is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Jay Mart Public and Sri Trang Agro Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sri Trang Agro and Jay Mart 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 Jay Mart Public are associated (or correlated) with Sri Trang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sri Trang Agro has no effect on the direction of Jay Mart i.e., Jay Mart and Sri Trang go up and down completely randomly.
Pair Corralation between Jay Mart and Sri Trang
Assuming the 90 days trading horizon Jay Mart Public is expected to generate 1.04 times more return on investment than Sri Trang. However, Jay Mart is 1.04 times more volatile than Sri Trang Agro Industry. It trades about -0.15 of its potential returns per unit of risk. Sri Trang Agro Industry is currently generating about -0.19 per unit of risk. If you would invest 1,550 in Jay Mart Public on September 1, 2024 and sell it today you would lose (140.00) from holding Jay Mart Public or give up 9.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Jay Mart Public vs. Sri Trang Agro Industry
Performance |
| Timeline |
| Jay Mart Public |
| Sri Trang Agro |
Jay Mart and Sri Trang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jay Mart and Sri Trang
The main advantage of trading using opposite Jay Mart and Sri Trang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jay Mart position performs unexpectedly, Sri Trang 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 Sri Trang will offset losses from the drop in Sri Trang's long position.| Jay Mart vs. JMT Network Services | Jay Mart vs. Com7 PCL | Jay Mart vs. KCE Electronics Public | Jay Mart vs. Singer Thailand Public |
| Sri Trang vs. Sri Trang Gloves | Sri Trang vs. Charoen Pokphand Foods | Sri Trang vs. Thai Union Group | Sri Trang vs. The Siam Cement |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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