Correlation Between Mena Transport and SAF Special
Can any of the company-specific risk be diversified away by investing in both Mena Transport and SAF Special 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 SAF Special 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 SAF Special Steel, you can compare the effects of market volatilities on Mena Transport and SAF Special 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 SAF Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mena Transport and SAF Special.
Diversification Opportunities for Mena Transport and SAF Special
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Mena and SAF is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Mena Transport Public and SAF Special Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAF Special Steel 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 SAF Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAF Special Steel has no effect on the direction of Mena Transport i.e., Mena Transport and SAF Special go up and down completely randomly.
Pair Corralation between Mena Transport and SAF Special
Assuming the 90 days trading horizon Mena Transport Public is expected to under-perform the SAF Special. But the stock apears to be less risky and, when comparing its historical volatility, Mena Transport Public is 1.21 times less risky than SAF Special. The stock trades about -0.07 of its potential returns per unit of risk. The SAF Special Steel is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 73.00 in SAF Special Steel on September 3, 2024 and sell it today you would lose (18.00) from holding SAF Special Steel or give up 24.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mena Transport Public vs. SAF Special Steel
Performance |
| Timeline |
| Mena Transport Public |
| SAF Special Steel |
Mena Transport and SAF Special Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mena Transport and SAF Special
The main advantage of trading using opposite Mena Transport and SAF Special positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mena Transport position performs unexpectedly, SAF Special 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 SAF Special will offset losses from the drop in SAF Special'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 |
| SAF Special vs. Diamond Building Products | SAF Special vs. MCS Steel Public | SAF Special vs. Asia Green Energy | SAF Special vs. Hwa Fong Rubber |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |