Correlation Between Micro Leasing and Somboon Advance
Can any of the company-specific risk be diversified away by investing in both Micro Leasing and Somboon Advance 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 Micro Leasing and Somboon Advance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micro Leasing Public and Somboon Advance Technology, you can compare the effects of market volatilities on Micro Leasing and Somboon Advance 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 Micro Leasing with a short position of Somboon Advance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micro Leasing and Somboon Advance.
Diversification Opportunities for Micro Leasing and Somboon Advance
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Micro and Somboon is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Micro Leasing Public and Somboon Advance Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Somboon Advance Tech and Micro Leasing 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 Micro Leasing Public are associated (or correlated) with Somboon Advance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Somboon Advance Tech has no effect on the direction of Micro Leasing i.e., Micro Leasing and Somboon Advance go up and down completely randomly.
Pair Corralation between Micro Leasing and Somboon Advance
Assuming the 90 days trading horizon Micro Leasing Public is expected to under-perform the Somboon Advance. In addition to that, Micro Leasing is 3.24 times more volatile than Somboon Advance Technology. It trades about -0.47 of its total potential returns per unit of risk. Somboon Advance Technology is currently generating about -0.41 per unit of volatility. If you would invest 1,210 in Somboon Advance Technology on August 30, 2024 and sell it today you would lose (110.00) from holding Somboon Advance Technology or give up 9.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Micro Leasing Public vs. Somboon Advance Technology
Performance |
| Timeline |
| Micro Leasing Public |
| Somboon Advance Tech |
Micro Leasing and Somboon Advance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Micro Leasing and Somboon Advance
The main advantage of trading using opposite Micro Leasing and Somboon Advance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micro Leasing position performs unexpectedly, Somboon Advance 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 Somboon Advance will offset losses from the drop in Somboon Advance's long position.| Micro Leasing vs. Amanah Leasing Public | Micro Leasing vs. Infraset Public | Micro Leasing vs. JMT Network Services |
| Somboon Advance vs. AAPICO Hitech Public | Somboon Advance vs. Thai Stanley Electric | Somboon Advance vs. Hana Microelectronics Public | Somboon Advance vs. TISCO Financial Group |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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