Correlation Between Mena Transport and Praram 9
Can any of the company-specific risk be diversified away by investing in both Mena Transport and Praram 9 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 Mena Transport and Praram 9 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mena Transport Public and Praram 9 Hospital, you can compare the effects of market volatilities on Mena Transport and Praram 9 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 Mena Transport with a short position of Praram 9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mena Transport and Praram 9.
Diversification Opportunities for Mena Transport and Praram 9
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mena and Praram is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Mena Transport Public and Praram 9 Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Praram 9 Hospital and Mena Transport 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 Mena Transport Public are associated (or correlated) with Praram 9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Praram 9 Hospital has no effect on the direction of Mena Transport i.e., Mena Transport and Praram 9 go up and down completely randomly.
Pair Corralation between Mena Transport and Praram 9
Assuming the 90 days trading horizon Mena Transport Public is expected to under-perform the Praram 9. In addition to that, Mena Transport is 2.08 times more volatile than Praram 9 Hospital. It trades about -0.06 of its total potential returns per unit of risk. Praram 9 Hospital is currently generating about 0.15 per unit of volatility. If you would invest 1,468 in Praram 9 Hospital on September 3, 2024 and sell it today you would earn a total of 1,107 from holding Praram 9 Hospital or generate 75.41% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Mena Transport Public vs. Praram 9 Hospital
Performance |
Timeline |
Mena Transport Public |
Praram 9 Hospital |
Mena Transport and Praram 9 Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mena Transport and Praram 9
The main advantage of trading using opposite Mena Transport and Praram 9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mena Transport position performs unexpectedly, Praram 9 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 Praram 9 will offset losses from the drop in Praram 9's long position.Mena Transport vs. Mono Next Public | Mena Transport vs. Triple i Logistics | Mena Transport vs. Dynasty Ceramic Public | Mena Transport vs. The Erawan Group |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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