Correlation Between SC Asset and Thai Solar
Can any of the company-specific risk be diversified away by investing in both SC Asset and Thai Solar 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 SC Asset and Thai Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SC Asset and Thai Solar Energy, you can compare the effects of market volatilities on SC Asset and Thai Solar 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 SC Asset with a short position of Thai Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of SC Asset and Thai Solar.
Diversification Opportunities for SC Asset and Thai Solar
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SC Asset and Thai is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding SC Asset and Thai Solar Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Solar Energy and SC Asset 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 SC Asset are associated (or correlated) with Thai Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Solar Energy has no effect on the direction of SC Asset i.e., SC Asset and Thai Solar go up and down completely randomly.
Pair Corralation between SC Asset and Thai Solar
Assuming the 90 days horizon SC Asset is expected to generate 0.62 times more return on investment than Thai Solar. However, SC Asset is 1.61 times less risky than Thai Solar. It trades about -0.23 of its potential returns per unit of risk. Thai Solar Energy is currently generating about -0.23 per unit of risk. If you would invest 302.00 in SC Asset on September 1, 2024 and sell it today you would lose (14.00) from holding SC Asset or give up 4.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
SC Asset vs. Thai Solar Energy
Performance |
| Timeline |
| SC Asset |
| Thai Solar Energy |
SC Asset and Thai Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SC Asset and Thai Solar
The main advantage of trading using opposite SC Asset and Thai Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SC Asset position performs unexpectedly, Thai Solar 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 Thai Solar will offset losses from the drop in Thai Solar's long position.The idea behind SC Asset and Thai Solar Energy 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.| Thai Solar vs. Gunkul Engineering Public | Thai Solar vs. CK Power Public | Thai Solar vs. WHA Public | Thai Solar vs. Energy Absolute 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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