Correlation Between Singha Estate and Nusasiri Public
Can any of the company-specific risk be diversified away by investing in both Singha Estate and Nusasiri Public 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 Singha Estate and Nusasiri Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Singha Estate Public and Nusasiri Public, you can compare the effects of market volatilities on Singha Estate and Nusasiri Public 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 Singha Estate with a short position of Nusasiri Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singha Estate and Nusasiri Public.
Diversification Opportunities for Singha Estate and Nusasiri Public
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Singha and Nusasiri is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Singha Estate Public and Nusasiri Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nusasiri Public and Singha Estate 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 Singha Estate Public are associated (or correlated) with Nusasiri Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nusasiri Public has no effect on the direction of Singha Estate i.e., Singha Estate and Nusasiri Public go up and down completely randomly.
Pair Corralation between Singha Estate and Nusasiri Public
Given the investment horizon of 90 days Singha Estate Public is expected to under-perform the Nusasiri Public. But the stock apears to be less risky and, when comparing its historical volatility, Singha Estate Public is 2.02 times less risky than Nusasiri Public. The stock trades about -0.22 of its potential returns per unit of risk. The Nusasiri Public is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 26.00 in Nusasiri Public on September 5, 2024 and sell it today you would lose (2.00) from holding Nusasiri Public or give up 7.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Singha Estate Public vs. Nusasiri Public
Performance |
| Timeline |
| Singha Estate Public |
| Nusasiri Public |
Singha Estate and Nusasiri Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singha Estate and Nusasiri Public
The main advantage of trading using opposite Singha Estate and Nusasiri Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singha Estate position performs unexpectedly, Nusasiri Public 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 Nusasiri Public will offset losses from the drop in Nusasiri Public's long position.The idea behind Singha Estate Public and Nusasiri Public pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Nusasiri Public vs. Property Perfect Public | Nusasiri Public vs. SC Asset | Nusasiri Public vs. Origin Property PCL | Nusasiri Public vs. Ananda Development 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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