Correlation Between Somboon Advance and Central Retail
Can any of the company-specific risk be diversified away by investing in both Somboon Advance and Central Retail 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 Central Retail 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 Central Retail, you can compare the effects of market volatilities on Somboon Advance and Central Retail 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 Central Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Somboon Advance and Central Retail.
Diversification Opportunities for Somboon Advance and Central Retail
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Somboon and Central is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Somboon Advance Technology and Central Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Retail 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 Central Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Retail has no effect on the direction of Somboon Advance i.e., Somboon Advance and Central Retail go up and down completely randomly.
Pair Corralation between Somboon Advance and Central Retail
Assuming the 90 days trading horizon Somboon Advance Technology is expected to under-perform the Central Retail. But the stock apears to be less risky and, when comparing its historical volatility, Somboon Advance Technology is 1.91 times less risky than Central Retail. The stock trades about -0.34 of its potential returns per unit of risk. The Central Retail is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 3,100 in Central Retail on August 28, 2024 and sell it today you would earn a total of 400.00 from holding Central Retail or generate 12.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Somboon Advance Technology vs. Central Retail
Performance |
| Timeline |
| Somboon Advance Tech |
| Central Retail |
Somboon Advance and Central Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Somboon Advance and Central Retail
The main advantage of trading using opposite Somboon Advance and Central Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Somboon Advance position performs unexpectedly, Central Retail 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 Central Retail will offset losses from the drop in Central Retail'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 |
| Central Retail vs. The Erawan Group | Central Retail vs. Airports of Thailand | Central Retail vs. Eastern Technical Engineering | Central Retail vs. Pylon 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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