Correlation Between President Bakery and SP Syndicate
Can any of the company-specific risk be diversified away by investing in both President Bakery and SP Syndicate 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 SP Syndicate 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 SP Syndicate Public, you can compare the effects of market volatilities on President Bakery and SP Syndicate 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 SP Syndicate. Check out your portfolio center. Please also check ongoing floating volatility patterns of President Bakery and SP Syndicate.
Diversification Opportunities for President Bakery and SP Syndicate
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between President and SNP is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding President Bakery Public and SP Syndicate Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SP Syndicate 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 SP Syndicate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SP Syndicate Public has no effect on the direction of President Bakery i.e., President Bakery and SP Syndicate go up and down completely randomly.
Pair Corralation between President Bakery and SP Syndicate
Assuming the 90 days horizon President Bakery Public is expected to under-perform the SP Syndicate. In addition to that, President Bakery is 1.41 times more volatile than SP Syndicate Public. It trades about -0.15 of its total potential returns per unit of risk. SP Syndicate Public is currently generating about 0.06 per unit of volatility. If you would invest 1,100 in SP Syndicate Public on November 4, 2024 and sell it today you would earn a total of 10.00 from holding SP Syndicate Public or generate 0.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
President Bakery Public vs. SP Syndicate Public
Performance |
| Timeline |
| President Bakery Public |
| SP Syndicate Public |
President Bakery and SP Syndicate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with President Bakery and SP Syndicate
The main advantage of trading using opposite President Bakery and SP Syndicate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if President Bakery position performs unexpectedly, SP Syndicate 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 SP Syndicate will offset losses from the drop in SP Syndicate's 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 |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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