Correlation Between SCB X and CK Power
Can any of the company-specific risk be diversified away by investing in both SCB X and CK Power 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 SCB X and CK Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCB X Public and CK Power Public, you can compare the effects of market volatilities on SCB X and CK Power 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 SCB X with a short position of CK Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCB X and CK Power.
Diversification Opportunities for SCB X and CK Power
Very good diversification
The 3 months correlation between SCB and CKP is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding SCB X Public and CK Power Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CK Power Public and SCB X 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 SCB X Public are associated (or correlated) with CK Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CK Power Public has no effect on the direction of SCB X i.e., SCB X and CK Power go up and down completely randomly.
Pair Corralation between SCB X and CK Power
Assuming the 90 days trading horizon SCB X Public is expected to generate 0.49 times more return on investment than CK Power. However, SCB X Public is 2.03 times less risky than CK Power. It trades about 0.05 of its potential returns per unit of risk. CK Power Public is currently generating about -0.18 per unit of risk. If you would invest 11,350 in SCB X Public on August 25, 2024 and sell it today you would earn a total of 100.00 from holding SCB X Public or generate 0.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
SCB X Public vs. CK Power Public
Performance |
| Timeline |
| SCB X Public |
| CK Power Public |
SCB X and CK Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCB X and CK Power
The main advantage of trading using opposite SCB X and CK Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCB X position performs unexpectedly, CK Power 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 CK Power will offset losses from the drop in CK Power's long position.| SCB X vs. Ramkhamhaeng Hospital Public | SCB X vs. Bioscience Animal Health | SCB X vs. Digital Telecommunications Infrastructure | SCB X vs. PTT OIL RETAIL |
| CK Power vs. WHA Public | CK Power vs. TPI Polene Power | CK Power vs. Bangkok Expressway and | CK Power vs. BGrimm 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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