Correlation Between President Bakery and Ocean Glass
Can any of the company-specific risk be diversified away by investing in both President Bakery and Ocean Glass 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 Ocean Glass 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 Ocean Glass Public, you can compare the effects of market volatilities on President Bakery and Ocean Glass 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 Ocean Glass. Check out your portfolio center. Please also check ongoing floating volatility patterns of President Bakery and Ocean Glass.
Diversification Opportunities for President Bakery and Ocean Glass
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between President and Ocean is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding President Bakery Public and Ocean Glass Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocean Glass 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 Ocean Glass. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocean Glass Public has no effect on the direction of President Bakery i.e., President Bakery and Ocean Glass go up and down completely randomly.
Pair Corralation between President Bakery and Ocean Glass
Assuming the 90 days horizon President Bakery Public is expected to under-perform the Ocean Glass. But the stock apears to be less risky and, when comparing its historical volatility, President Bakery Public is 120.32 times less risky than Ocean Glass. The stock trades about -0.08 of its potential returns per unit of risk. The Ocean Glass Public is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,470 in Ocean Glass Public on September 3, 2024 and sell it today you would lose (570.00) from holding Ocean Glass Public or give up 23.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
President Bakery Public vs. Ocean Glass Public
Performance |
| Timeline |
| President Bakery Public |
| Ocean Glass Public |
President Bakery and Ocean Glass Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with President Bakery and Ocean Glass
The main advantage of trading using opposite President Bakery and Ocean Glass positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if President Bakery position performs unexpectedly, Ocean Glass 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 Ocean Glass will offset losses from the drop in Ocean Glass' long position.| President Bakery vs. MK Restaurant Group | President Bakery vs. Haad Thip Public | President Bakery vs. Thai President Foods | President Bakery vs. Minor International Public |
| Ocean Glass vs. Peoples Garment Public | Ocean Glass vs. LPN Development Public | Ocean Glass vs. Nawarat Patanakarn Public | Ocean Glass vs. President Bakery 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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