Correlation Between NCL International and Peerapat Technology
Can any of the company-specific risk be diversified away by investing in both NCL International and Peerapat Technology 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 NCL International and Peerapat Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NCL International Logistics and Peerapat Technology Public, you can compare the effects of market volatilities on NCL International and Peerapat Technology 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 NCL International with a short position of Peerapat Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of NCL International and Peerapat Technology.
Diversification Opportunities for NCL International and Peerapat Technology
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NCL and Peerapat is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding NCL International Logistics and Peerapat Technology Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peerapat Technology and NCL International 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 NCL International Logistics are associated (or correlated) with Peerapat Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peerapat Technology has no effect on the direction of NCL International i.e., NCL International and Peerapat Technology go up and down completely randomly.
Pair Corralation between NCL International and Peerapat Technology
Assuming the 90 days trading horizon NCL International Logistics is expected to under-perform the Peerapat Technology. In addition to that, NCL International is 1.72 times more volatile than Peerapat Technology Public. It trades about -0.02 of its total potential returns per unit of risk. Peerapat Technology Public is currently generating about 0.07 per unit of volatility. If you would invest 141.00 in Peerapat Technology Public on August 29, 2024 and sell it today you would earn a total of 5.00 from holding Peerapat Technology Public or generate 3.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NCL International Logistics vs. Peerapat Technology Public
Performance |
| Timeline |
| NCL International |
| Peerapat Technology |
NCL International and Peerapat Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NCL International and Peerapat Technology
The main advantage of trading using opposite NCL International and Peerapat Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NCL International position performs unexpectedly, Peerapat Technology 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 Peerapat Technology will offset losses from the drop in Peerapat Technology's long position.| NCL International vs. Kingsmen CMTI Public | NCL International vs. Masterkool International Public | NCL International vs. News Network | NCL International vs. Internet Thailand Public |
| Peerapat Technology vs. Megachem Public | Peerapat Technology vs. M Vision Public | Peerapat Technology vs. NCL International Logistics | Peerapat Technology vs. Pioneer Motor 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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