Correlation Between RB FOOD and AEON Thana
Can any of the company-specific risk be diversified away by investing in both RB FOOD and AEON Thana 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 RB FOOD and AEON Thana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RB FOOD SUPPLY and AEON Thana Sinsap, you can compare the effects of market volatilities on RB FOOD and AEON Thana 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 RB FOOD with a short position of AEON Thana. Check out your portfolio center. Please also check ongoing floating volatility patterns of RB FOOD and AEON Thana.
Diversification Opportunities for RB FOOD and AEON Thana
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between RBF-R and AEON is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding RB FOOD SUPPLY and AEON Thana Sinsap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEON Thana Sinsap and RB FOOD 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 RB FOOD SUPPLY are associated (or correlated) with AEON Thana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEON Thana Sinsap has no effect on the direction of RB FOOD i.e., RB FOOD and AEON Thana go up and down completely randomly.
Pair Corralation between RB FOOD and AEON Thana
Assuming the 90 days trading horizon RB FOOD SUPPLY is expected to under-perform the AEON Thana. In addition to that, RB FOOD is 5.56 times more volatile than AEON Thana Sinsap. It trades about -0.14 of its total potential returns per unit of risk. AEON Thana Sinsap is currently generating about -0.19 per unit of volatility. If you would invest 13,550 in AEON Thana Sinsap on September 5, 2024 and sell it today you would lose (1,050) from holding AEON Thana Sinsap or give up 7.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RB FOOD SUPPLY vs. AEON Thana Sinsap
Performance |
| Timeline |
| RB FOOD SUPPLY |
| AEON Thana Sinsap |
RB FOOD and AEON Thana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RB FOOD and AEON Thana
The main advantage of trading using opposite RB FOOD and AEON Thana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RB FOOD position performs unexpectedly, AEON Thana 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 AEON Thana will offset losses from the drop in AEON Thana's long position.| RB FOOD vs. Kingsmen CMTI Public | RB FOOD vs. Hydrotek Public | RB FOOD vs. Karmarts Public | RB FOOD vs. KC Metalsheet Public |
| AEON Thana vs. Thai Steel Cable | AEON Thana vs. Tropical Canning Public | AEON Thana vs. RB Food Supply | AEON Thana vs. Eureka Design 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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