Correlation Between SCB X and Com7 PCL
Can any of the company-specific risk be diversified away by investing in both SCB X and Com7 PCL 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 Com7 PCL 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 Com7 PCL, you can compare the effects of market volatilities on SCB X and Com7 PCL 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 Com7 PCL. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCB X and Com7 PCL.
Diversification Opportunities for SCB X and Com7 PCL
Poor diversification
The 3 months correlation between SCB and Com7 is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding SCB X Public and Com7 PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Com7 PCL 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 Com7 PCL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Com7 PCL has no effect on the direction of SCB X i.e., SCB X and Com7 PCL go up and down completely randomly.
Pair Corralation between SCB X and Com7 PCL
Assuming the 90 days trading horizon SCB X Public is expected to generate 0.21 times more return on investment than Com7 PCL. However, SCB X Public is 4.69 times less risky than Com7 PCL. It trades about 0.13 of its potential returns per unit of risk. Com7 PCL is currently generating about 0.01 per unit of risk. If you would invest 11,200 in SCB X Public on August 31, 2024 and sell it today you would earn a total of 200.00 from holding SCB X Public or generate 1.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCB X Public vs. Com7 PCL
Performance |
| Timeline |
| SCB X Public |
| Com7 PCL |
SCB X and Com7 PCL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCB X and Com7 PCL
The main advantage of trading using opposite SCB X and Com7 PCL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCB X position performs unexpectedly, Com7 PCL 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 Com7 PCL will offset losses from the drop in Com7 PCL's long position.| SCB X vs. Bangkok Dusit Medical | SCB X vs. Bank of Ayudhya | SCB X vs. KTBST Mixed Leasehold | SCB X vs. TISCO Financial Group |
| Com7 PCL vs. TRC Construction Public | Com7 PCL vs. Bangkok Expressway and | Com7 PCL vs. Lohakit Metal Public | Com7 PCL vs. Gunkul Engineering 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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