Correlation Between Somboon Advance and ABSOLUTE CLEAN
Can any of the company-specific risk be diversified away by investing in both Somboon Advance and ABSOLUTE CLEAN 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 Somboon Advance and ABSOLUTE CLEAN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Somboon Advance Technology and ABSOLUTE CLEAN ENERGY, you can compare the effects of market volatilities on Somboon Advance and ABSOLUTE CLEAN 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 Somboon Advance with a short position of ABSOLUTE CLEAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Somboon Advance and ABSOLUTE CLEAN.
Diversification Opportunities for Somboon Advance and ABSOLUTE CLEAN
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Somboon and ABSOLUTE is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Somboon Advance Technology and ABSOLUTE CLEAN ENERGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABSOLUTE CLEAN ENERGY and Somboon Advance 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 Somboon Advance Technology are associated (or correlated) with ABSOLUTE CLEAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABSOLUTE CLEAN ENERGY has no effect on the direction of Somboon Advance i.e., Somboon Advance and ABSOLUTE CLEAN go up and down completely randomly.
Pair Corralation between Somboon Advance and ABSOLUTE CLEAN
Assuming the 90 days trading horizon Somboon Advance Technology is expected to generate 0.36 times more return on investment than ABSOLUTE CLEAN. However, Somboon Advance Technology is 2.81 times less risky than ABSOLUTE CLEAN. It trades about -0.12 of its potential returns per unit of risk. ABSOLUTE CLEAN ENERGY is currently generating about -0.11 per unit of risk. If you would invest 1,220 in Somboon Advance Technology on September 3, 2024 and sell it today you would lose (130.00) from holding Somboon Advance Technology or give up 10.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Somboon Advance Technology vs. ABSOLUTE CLEAN ENERGY
Performance |
| Timeline |
| Somboon Advance Tech |
| ABSOLUTE CLEAN ENERGY |
Somboon Advance and ABSOLUTE CLEAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Somboon Advance and ABSOLUTE CLEAN
The main advantage of trading using opposite Somboon Advance and ABSOLUTE CLEAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Somboon Advance position performs unexpectedly, ABSOLUTE CLEAN 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 ABSOLUTE CLEAN will offset losses from the drop in ABSOLUTE CLEAN's long position.| Somboon Advance vs. AAPICO Hitech Public | Somboon Advance vs. Thai Stanley Electric | Somboon Advance vs. Hana Microelectronics Public | Somboon Advance vs. TISCO Financial Group |
| ABSOLUTE CLEAN vs. Absolute Clean Energy | ABSOLUTE CLEAN vs. Super Energy | ABSOLUTE CLEAN vs. TPI Polene Power | ABSOLUTE CLEAN vs. CK Power 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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