Correlation Between Nawarat Patanakarn and Pan Asia
Can any of the company-specific risk be diversified away by investing in both Nawarat Patanakarn and Pan Asia 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 Nawarat Patanakarn and Pan Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nawarat Patanakarn Public and Pan Asia Footwear, you can compare the effects of market volatilities on Nawarat Patanakarn and Pan Asia 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 Nawarat Patanakarn with a short position of Pan Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nawarat Patanakarn and Pan Asia.
Diversification Opportunities for Nawarat Patanakarn and Pan Asia
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nawarat and Pan is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Nawarat Patanakarn Public and Pan Asia Footwear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pan Asia Footwear and Nawarat Patanakarn 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 Nawarat Patanakarn Public are associated (or correlated) with Pan Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pan Asia Footwear has no effect on the direction of Nawarat Patanakarn i.e., Nawarat Patanakarn and Pan Asia go up and down completely randomly.
Pair Corralation between Nawarat Patanakarn and Pan Asia
Assuming the 90 days trading horizon Nawarat Patanakarn Public is expected to under-perform the Pan Asia. In addition to that, Nawarat Patanakarn is 1.5 times more volatile than Pan Asia Footwear. It trades about -0.06 of its total potential returns per unit of risk. Pan Asia Footwear is currently generating about 0.07 per unit of volatility. If you would invest 92.00 in Pan Asia Footwear on October 22, 2024 and sell it today you would earn a total of 3.00 from holding Pan Asia Footwear or generate 3.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nawarat Patanakarn Public vs. Pan Asia Footwear
Performance |
| Timeline |
| Nawarat Patanakarn Public |
| Pan Asia Footwear |
Nawarat Patanakarn and Pan Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nawarat Patanakarn and Pan Asia
The main advantage of trading using opposite Nawarat Patanakarn and Pan Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nawarat Patanakarn position performs unexpectedly, Pan Asia 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 Pan Asia will offset losses from the drop in Pan Asia's long position.| Nawarat Patanakarn vs. Italian Thai Development Public | Nawarat Patanakarn vs. Power Line Engineering | Nawarat Patanakarn vs. Property Perfect Public | Nawarat Patanakarn vs. MK Real Estate |
| Pan Asia vs. Nawarat Patanakarn Public | Pan Asia vs. KGI Securities Public | Pan Asia vs. Pato Chemical Industry | Pan Asia vs. Ocean Glass 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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