Correlation Between Mega Lifesciences and Srinanaporn Marketing
Can any of the company-specific risk be diversified away by investing in both Mega Lifesciences and Srinanaporn Marketing 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 Mega Lifesciences and Srinanaporn Marketing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mega Lifesciences Public and Srinanaporn Marketing Public, you can compare the effects of market volatilities on Mega Lifesciences and Srinanaporn Marketing 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 Mega Lifesciences with a short position of Srinanaporn Marketing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mega Lifesciences and Srinanaporn Marketing.
Diversification Opportunities for Mega Lifesciences and Srinanaporn Marketing
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mega and Srinanaporn is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Mega Lifesciences Public and Srinanaporn Marketing Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Srinanaporn Marketing and Mega Lifesciences 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 Mega Lifesciences Public are associated (or correlated) with Srinanaporn Marketing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Srinanaporn Marketing has no effect on the direction of Mega Lifesciences i.e., Mega Lifesciences and Srinanaporn Marketing go up and down completely randomly.
Pair Corralation between Mega Lifesciences and Srinanaporn Marketing
Assuming the 90 days trading horizon Mega Lifesciences Public is expected to under-perform the Srinanaporn Marketing. But the stock apears to be less risky and, when comparing its historical volatility, Mega Lifesciences Public is 1.22 times less risky than Srinanaporn Marketing. The stock trades about -0.28 of its potential returns per unit of risk. The Srinanaporn Marketing Public is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 1,270 in Srinanaporn Marketing Public on September 1, 2024 and sell it today you would lose (70.00) from holding Srinanaporn Marketing Public or give up 5.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mega Lifesciences Public vs. Srinanaporn Marketing Public
Performance |
| Timeline |
| Mega Lifesciences Public |
| Srinanaporn Marketing |
Mega Lifesciences and Srinanaporn Marketing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mega Lifesciences and Srinanaporn Marketing
The main advantage of trading using opposite Mega Lifesciences and Srinanaporn Marketing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mega Lifesciences position performs unexpectedly, Srinanaporn Marketing 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 Srinanaporn Marketing will offset losses from the drop in Srinanaporn Marketing's long position.| Mega Lifesciences vs. Home Product Center | Mega Lifesciences vs. Minor International Public | Mega Lifesciences vs. Com7 PCL | Mega Lifesciences vs. Bangkok Dusit Medical |
| Srinanaporn Marketing vs. Mega Lifesciences Public | Srinanaporn Marketing vs. Com7 PCL | Srinanaporn Marketing vs. Thai Union Group | Srinanaporn Marketing vs. Jay Mart 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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