Correlation Between Sawang Export and Communication System
Can any of the company-specific risk be diversified away by investing in both Sawang Export 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 Sawang Export and Communication System into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sawang Export Public and Communication System Solution, you can compare the effects of market volatilities on Sawang Export 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 Sawang Export with a short position of Communication System. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sawang Export and Communication System.
Diversification Opportunities for Sawang Export and Communication System
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sawang and Communication is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Sawang Export Public and Communication System Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Communication System and Sawang Export 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 Sawang Export Public 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 Sawang Export i.e., Sawang Export and Communication System go up and down completely randomly.
Pair Corralation between Sawang Export and Communication System
Assuming the 90 days trading horizon Sawang Export Public is expected to under-perform the Communication System. But the stock apears to be less risky and, when comparing its historical volatility, Sawang Export Public is 1.59 times less risky than Communication System. The stock trades about -0.03 of its potential returns per unit of risk. The Communication System Solution is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 86.00 in Communication System Solution on September 1, 2024 and sell it today you would earn a total of 9.00 from holding Communication System Solution or generate 10.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Sawang Export Public vs. Communication System Solution
Performance |
| Timeline |
| Sawang Export Public |
| Communication System |
Sawang Export and Communication System Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sawang Export and Communication System
The main advantage of trading using opposite Sawang Export and Communication System positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sawang Export 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.| Sawang Export vs. TRC Construction Public | Sawang Export vs. Bangkok Expressway and | Sawang Export vs. Lohakit Metal Public | Sawang Export vs. Gunkul Engineering Public |
| Communication System vs. Gulf Energy Development | Communication System vs. Energy Absolute Public | Communication System vs. WHA Public | Communication System vs. Bangkok Expressway and |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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