Correlation Between Peoples Garment and President Bakery
Can any of the company-specific risk be diversified away by investing in both Peoples Garment and President Bakery 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 President Bakery 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 President Bakery Public, you can compare the effects of market volatilities on Peoples Garment and President Bakery 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 President Bakery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peoples Garment and President Bakery.
Diversification Opportunities for Peoples Garment and President Bakery
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Peoples and President is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Peoples Garment Public and President Bakery Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on President Bakery 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 President Bakery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of President Bakery Public has no effect on the direction of Peoples Garment i.e., Peoples Garment and President Bakery go up and down completely randomly.
Pair Corralation between Peoples Garment and President Bakery
Assuming the 90 days horizon Peoples Garment Public is expected to generate 0.43 times more return on investment than President Bakery. However, Peoples Garment Public is 2.31 times less risky than President Bakery. It trades about 0.06 of its potential returns per unit of risk. President Bakery Public is currently generating about -0.01 per unit of risk. If you would invest 890.00 in Peoples Garment Public on August 24, 2024 and sell it today you would earn a total of 5.00 from holding Peoples Garment Public or generate 0.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Peoples Garment Public vs. President Bakery Public
Performance |
| Timeline |
| Peoples Garment Public |
| President Bakery Public |
Peoples Garment and President Bakery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peoples Garment and President Bakery
The main advantage of trading using opposite Peoples Garment and President Bakery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peoples Garment position performs unexpectedly, President Bakery 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 President Bakery will offset losses from the drop in President Bakery's long position.| Peoples Garment vs. SCB X Public | Peoples Garment vs. Kasikornbank Public | Peoples Garment vs. PTT Public | Peoples Garment vs. Kasikornbank Public |
| President Bakery vs. MK Restaurant Group | President Bakery vs. Haad Thip Public | President Bakery vs. Thai President Foods | President Bakery vs. Minor International 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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