Correlation Between Krungdhep Sophon and Inoue Rubber
Can any of the company-specific risk be diversified away by investing in both Krungdhep Sophon and Inoue Rubber 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 Krungdhep Sophon and Inoue Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Krungdhep Sophon Public and Inoue Rubber Public, you can compare the effects of market volatilities on Krungdhep Sophon and Inoue Rubber 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 Krungdhep Sophon with a short position of Inoue Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Krungdhep Sophon and Inoue Rubber.
Diversification Opportunities for Krungdhep Sophon and Inoue Rubber
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Krungdhep and Inoue is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Krungdhep Sophon Public and Inoue Rubber Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inoue Rubber Public and Krungdhep Sophon 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 Krungdhep Sophon Public are associated (or correlated) with Inoue Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inoue Rubber Public has no effect on the direction of Krungdhep Sophon i.e., Krungdhep Sophon and Inoue Rubber go up and down completely randomly.
Pair Corralation between Krungdhep Sophon and Inoue Rubber
Assuming the 90 days trading horizon Krungdhep Sophon Public is expected to generate 1.0 times more return on investment than Inoue Rubber. However, Krungdhep Sophon is 1.0 times more volatile than Inoue Rubber Public. It trades about 0.12 of its potential returns per unit of risk. Inoue Rubber Public is currently generating about 0.11 per unit of risk. If you would invest 27,500 in Krungdhep Sophon Public on August 31, 2024 and sell it today you would earn a total of 1,300 from holding Krungdhep Sophon Public or generate 4.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Krungdhep Sophon Public vs. Inoue Rubber Public
Performance |
| Timeline |
| Krungdhep Sophon Public |
| Inoue Rubber Public |
Krungdhep Sophon and Inoue Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Krungdhep Sophon and Inoue Rubber
The main advantage of trading using opposite Krungdhep Sophon and Inoue Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Krungdhep Sophon position performs unexpectedly, Inoue Rubber 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 Inoue Rubber will offset losses from the drop in Inoue Rubber's long position.| Krungdhep Sophon vs. Thonburi Medical Centre | Krungdhep Sophon vs. Kang Yong Electric | Krungdhep Sophon vs. Jack Chia Industries | Krungdhep Sophon vs. Laguna Resorts Hotels |
| Inoue Rubber vs. Hwa Fong Rubber | Inoue Rubber vs. AAPICO Hitech Public | Inoue Rubber vs. Haad Thip Public | Inoue Rubber vs. Italian Thai Development Public |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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