Correlation Between Mena Transport and TRV Rubber
Can any of the company-specific risk be diversified away by investing in both Mena Transport and TRV 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 Mena Transport and TRV Rubber 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 TRV Rubber Products, you can compare the effects of market volatilities on Mena Transport and TRV 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 Mena Transport with a short position of TRV Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mena Transport and TRV Rubber.
Diversification Opportunities for Mena Transport and TRV Rubber
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mena and TRV is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Mena Transport Public and TRV Rubber Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRV Rubber Products 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 TRV Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRV Rubber Products has no effect on the direction of Mena Transport i.e., Mena Transport and TRV Rubber go up and down completely randomly.
Pair Corralation between Mena Transport and TRV Rubber
Assuming the 90 days trading horizon Mena Transport Public is expected to under-perform the TRV Rubber. But the stock apears to be less risky and, when comparing its historical volatility, Mena Transport Public is 1.29 times less risky than TRV Rubber. The stock trades about -0.06 of its potential returns per unit of risk. The TRV Rubber Products is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 330.00 in TRV Rubber Products on September 3, 2024 and sell it today you would lose (82.00) from holding TRV Rubber Products or give up 24.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 92.92% |
| Values | Daily Returns |
Mena Transport Public vs. TRV Rubber Products
Performance |
| Timeline |
| Mena Transport Public |
| TRV Rubber Products |
Mena Transport and TRV Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mena Transport and TRV Rubber
The main advantage of trading using opposite Mena Transport and TRV Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mena Transport position performs unexpectedly, TRV 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 TRV Rubber will offset losses from the drop in TRV Rubber'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 |
| TRV Rubber vs. PMC LABEL MATERIALS | TRV Rubber vs. Charoen Pokphand Foods | TRV Rubber vs. Sri panwa Hospitality | TRV Rubber vs. Ramkhamhaeng Hospital 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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