Correlation Between SCB X and Earth Tech
Can any of the company-specific risk be diversified away by investing in both SCB X and Earth Tech 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 Earth Tech 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 Earth Tech Environment, you can compare the effects of market volatilities on SCB X and Earth Tech 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 Earth Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCB X and Earth Tech.
Diversification Opportunities for SCB X and Earth Tech
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SCB and Earth is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding SCB X Public and Earth Tech Environment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Earth Tech Environment 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 Earth Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Earth Tech Environment has no effect on the direction of SCB X i.e., SCB X and Earth Tech go up and down completely randomly.
Pair Corralation between SCB X and Earth Tech
Assuming the 90 days trading horizon SCB X Public is expected to generate 0.35 times more return on investment than Earth Tech. However, SCB X Public is 2.86 times less risky than Earth Tech. It trades about 0.19 of its potential returns per unit of risk. Earth Tech Environment is currently generating about -0.28 per unit of risk. If you would invest 11,750 in SCB X Public on October 20, 2024 and sell it today you would earn a total of 400.00 from holding SCB X Public or generate 3.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
SCB X Public vs. Earth Tech Environment
Performance |
| Timeline |
| SCB X Public |
| Earth Tech Environment |
SCB X and Earth Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCB X and Earth Tech
The main advantage of trading using opposite SCB X and Earth Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCB X position performs unexpectedly, Earth Tech 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 Earth Tech will offset losses from the drop in Earth Tech's long position.| SCB X vs. Lohakit Metal Public | SCB X vs. KC Metalsheet Public | SCB X vs. Ramkhamhaeng Hospital Public | SCB X vs. Business Online PCL |
| Earth Tech vs. Gulf Energy Development | Earth Tech vs. Energy Absolute Public | Earth Tech vs. Gunkul Engineering Public | Earth Tech vs. Global Power Synergy |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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