Correlation Between Peoples Garment and Nawarat Patanakarn
Can any of the company-specific risk be diversified away by investing in both Peoples Garment 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 Peoples Garment and Nawarat Patanakarn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Peoples Garment Public and Nawarat Patanakarn Public, you can compare the effects of market volatilities on Peoples Garment 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 Peoples Garment with a short position of Nawarat Patanakarn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peoples Garment and Nawarat Patanakarn.
Diversification Opportunities for Peoples Garment and Nawarat Patanakarn
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Peoples and Nawarat is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Peoples Garment 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 Peoples Garment 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 Peoples Garment 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 Peoples Garment i.e., Peoples Garment and Nawarat Patanakarn go up and down completely randomly.
Pair Corralation between Peoples Garment and Nawarat Patanakarn
Assuming the 90 days horizon Peoples Garment Public is expected to generate 0.08 times more return on investment than Nawarat Patanakarn. However, Peoples Garment Public is 12.01 times less risky than Nawarat Patanakarn. It trades about 0.0 of its potential returns per unit of risk. Nawarat Patanakarn Public is currently generating about -0.31 per unit of risk. If you would invest 895.00 in Peoples Garment Public on September 4, 2024 and sell it today you would earn a total of 0.00 from holding Peoples Garment Public or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Peoples Garment Public vs. Nawarat Patanakarn Public
Performance |
| Timeline |
| Peoples Garment Public |
| Nawarat Patanakarn Public |
Peoples Garment and Nawarat Patanakarn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peoples Garment and Nawarat Patanakarn
The main advantage of trading using opposite Peoples Garment and Nawarat Patanakarn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peoples Garment 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.| Peoples Garment vs. Central Pattana Public | Peoples Garment vs. CP ALL Public | Peoples Garment vs. Bangkok Dusit Medical | Peoples Garment vs. Airports of Thailand |
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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 Stocks Directory module to find actively traded stocks across global markets.
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