Correlation Between Rojana Industrial and Communication System
Can any of the company-specific risk be diversified away by investing in both Rojana Industrial and Communication System 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 Rojana Industrial and Communication System into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rojana Industrial Park and Communication System Solution, you can compare the effects of market volatilities on Rojana Industrial and Communication System 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 Rojana Industrial with a short position of Communication System. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rojana Industrial and Communication System.
Diversification Opportunities for Rojana Industrial and Communication System
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Rojana and Communication is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Rojana Industrial Park and Communication System Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Communication System and Rojana Industrial 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 Rojana Industrial Park are associated (or correlated) with Communication System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Communication System has no effect on the direction of Rojana Industrial i.e., Rojana Industrial and Communication System go up and down completely randomly.
Pair Corralation between Rojana Industrial and Communication System
Assuming the 90 days trading horizon Rojana Industrial Park is expected to under-perform the Communication System. But the stock apears to be less risky and, when comparing its historical volatility, Rojana Industrial Park is 1.24 times less risky than Communication System. The stock trades about -0.26 of its potential returns per unit of risk. The Communication System Solution is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 83.00 in Communication System Solution on October 20, 2024 and sell it today you would lose (4.00) from holding Communication System Solution or give up 4.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rojana Industrial Park vs. Communication System Solution
Performance |
| Timeline |
| Rojana Industrial Park |
| Communication System |
Rojana Industrial and Communication System Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rojana Industrial and Communication System
The main advantage of trading using opposite Rojana Industrial and Communication System positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rojana Industrial position performs unexpectedly, Communication System 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 Communication System will offset losses from the drop in Communication System's long position.| Rojana Industrial vs. Ratch Group Public | Rojana Industrial vs. RPCG Public | Rojana Industrial vs. Siam City Cement | Rojana Industrial vs. Siamgas and Petrochemicals |
| Communication System vs. Chularat Hospital Public | Communication System vs. Cal Comp Electronics Public | Communication System vs. Dynasty Ceramic Public | Communication System vs. Forth 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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