Correlation Between President Bakery and Nawarat Patanakarn
Can any of the company-specific risk be diversified away by investing in both President Bakery and Nawarat Patanakarn 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 President Bakery and Nawarat Patanakarn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between President Bakery Public and Nawarat Patanakarn Public, you can compare the effects of market volatilities on President Bakery and Nawarat Patanakarn 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 President Bakery with a short position of Nawarat Patanakarn. Check out your portfolio center. Please also check ongoing floating volatility patterns of President Bakery and Nawarat Patanakarn.
Diversification Opportunities for President Bakery and Nawarat Patanakarn
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between President and Nawarat is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding President Bakery Public and Nawarat Patanakarn Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nawarat Patanakarn Public and President Bakery 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 President Bakery Public are associated (or correlated) with Nawarat Patanakarn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nawarat Patanakarn Public has no effect on the direction of President Bakery i.e., President Bakery and Nawarat Patanakarn go up and down completely randomly.
Pair Corralation between President Bakery and Nawarat Patanakarn
Assuming the 90 days horizon President Bakery Public is expected to generate 0.25 times more return on investment than Nawarat Patanakarn. However, President Bakery Public is 3.94 times less risky than Nawarat Patanakarn. It trades about 0.03 of its potential returns per unit of risk. Nawarat Patanakarn Public is currently generating about -0.26 per unit of risk. If you would invest 5,925 in President Bakery Public on September 4, 2024 and sell it today you would earn a total of 50.00 from holding President Bakery Public or generate 0.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.56% |
| Values | Daily Returns |
President Bakery Public vs. Nawarat Patanakarn Public
Performance |
| Timeline |
| President Bakery Public |
| Nawarat Patanakarn Public |
President Bakery and Nawarat Patanakarn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with President Bakery and Nawarat Patanakarn
The main advantage of trading using opposite President Bakery and Nawarat Patanakarn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if President Bakery position performs unexpectedly, Nawarat Patanakarn 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 Nawarat Patanakarn will offset losses from the drop in Nawarat Patanakarn's long position.| President Bakery vs. Airports of Thailand | President Bakery vs. PTT Public | President Bakery vs. Bangkok Dusit Medical | President Bakery vs. Kasikornbank Public |
| 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 |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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