Correlation Between Premier Marketing and Sri Trang
Can any of the company-specific risk be diversified away by investing in both Premier Marketing and Sri Trang 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 Premier Marketing and Sri Trang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Premier Marketing Public and Sri Trang Agro Industry, you can compare the effects of market volatilities on Premier Marketing and Sri Trang 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 Premier Marketing with a short position of Sri Trang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Premier Marketing and Sri Trang.
Diversification Opportunities for Premier Marketing and Sri Trang
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Premier and Sri is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Premier Marketing Public and Sri Trang Agro Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sri Trang Agro and Premier Marketing 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 Premier Marketing Public are associated (or correlated) with Sri Trang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sri Trang Agro has no effect on the direction of Premier Marketing i.e., Premier Marketing and Sri Trang go up and down completely randomly.
Pair Corralation between Premier Marketing and Sri Trang
Assuming the 90 days horizon Premier Marketing Public is expected to generate 0.97 times more return on investment than Sri Trang. However, Premier Marketing Public is 1.03 times less risky than Sri Trang. It trades about 0.16 of its potential returns per unit of risk. Sri Trang Agro Industry is currently generating about -0.17 per unit of risk. If you would invest 860.00 in Premier Marketing Public on August 24, 2024 and sell it today you would earn a total of 80.00 from holding Premier Marketing Public or generate 9.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Premier Marketing Public vs. Sri Trang Agro Industry
Performance |
| Timeline |
| Premier Marketing Public |
| Sri Trang Agro |
Premier Marketing and Sri Trang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Premier Marketing and Sri Trang
The main advantage of trading using opposite Premier Marketing and Sri Trang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premier Marketing position performs unexpectedly, Sri Trang 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 Sri Trang will offset losses from the drop in Sri Trang's long position.| Premier Marketing vs. CP ALL Public | Premier Marketing vs. Carabao Group Public | Premier Marketing vs. Thai Union Group | Premier Marketing vs. Minor International Public |
| Sri Trang vs. Sri Trang Gloves | Sri Trang vs. Charoen Pokphand Foods | Sri Trang vs. Thai Union Group | Sri Trang vs. The Siam Cement |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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