Correlation Between Rojana Industrial and K W
Can any of the company-specific risk be diversified away by investing in both Rojana Industrial and K W 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 K W 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 K W Metal, you can compare the effects of market volatilities on Rojana Industrial and K W 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 K W. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rojana Industrial and K W.
Diversification Opportunities for Rojana Industrial and K W
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Rojana and KWM is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Rojana Industrial Park and K W Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K W Metal 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 K W. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K W Metal has no effect on the direction of Rojana Industrial i.e., Rojana Industrial and K W go up and down completely randomly.
Pair Corralation between Rojana Industrial and K W
Assuming the 90 days trading horizon Rojana Industrial is expected to generate 50.48 times less return on investment than K W. But when comparing it to its historical volatility, Rojana Industrial Park is 23.2 times less risky than K W. It trades about 0.02 of its potential returns per unit of risk. K W Metal is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 158.00 in K W Metal on September 14, 2024 and sell it today you would lose (28.00) from holding K W Metal or give up 17.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rojana Industrial Park vs. K W Metal
Performance |
| Timeline |
| Rojana Industrial Park |
| K W Metal |
Rojana Industrial and K W Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rojana Industrial and K W
The main advantage of trading using opposite Rojana Industrial and K W positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rojana Industrial position performs unexpectedly, K W 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 K W will offset losses from the drop in K W's long position.| Rojana Industrial vs. WHA Public | Rojana Industrial vs. Global Power Synergy | Rojana Industrial vs. TPI Polene Power | Rojana Industrial vs. Bangkok Expressway and |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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