Correlation Between SCB X and Minor International
Can any of the company-specific risk be diversified away by investing in both SCB X and Minor International 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 Minor International 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 Minor International Public, you can compare the effects of market volatilities on SCB X and Minor International 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 Minor International. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCB X and Minor International.
Diversification Opportunities for SCB X and Minor International
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between SCB and Minor is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding SCB X Public and Minor International Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minor International 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 Minor International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minor International has no effect on the direction of SCB X i.e., SCB X and Minor International go up and down completely randomly.
Pair Corralation between SCB X and Minor International
Assuming the 90 days trading horizon SCB X Public is expected to generate 0.51 times more return on investment than Minor International. However, SCB X Public is 1.97 times less risky than Minor International. It trades about -0.02 of its potential returns per unit of risk. Minor International Public is currently generating about -0.02 per unit of risk. If you would invest 11,500 in SCB X Public on August 26, 2024 and sell it today you would lose (50.00) from holding SCB X Public or give up 0.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCB X Public vs. Minor International Public
Performance |
| Timeline |
| SCB X Public |
| Minor International |
SCB X and Minor International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCB X and Minor International
The main advantage of trading using opposite SCB X and Minor International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCB X position performs unexpectedly, Minor International 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 Minor International will offset losses from the drop in Minor International's long position.| SCB X vs. Thai Energy Storage | SCB X vs. Royal Orchid Hotel | SCB X vs. Grand Canal Land | SCB X vs. PRG Public |
| Minor International vs. SCB X Public | Minor International vs. Kasikornbank Public | Minor International vs. PTT Public | Minor International vs. Kasikornbank 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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