Correlation Between SCB X and TPI Polene
Can any of the company-specific risk be diversified away by investing in both SCB X and TPI Polene 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 TPI Polene 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 TPI Polene Power, you can compare the effects of market volatilities on SCB X and TPI Polene 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 TPI Polene. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCB X and TPI Polene.
Diversification Opportunities for SCB X and TPI Polene
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SCB and TPI is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding SCB X Public and TPI Polene Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TPI Polene Power 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 TPI Polene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TPI Polene Power has no effect on the direction of SCB X i.e., SCB X and TPI Polene go up and down completely randomly.
Pair Corralation between SCB X and TPI Polene
Assuming the 90 days trading horizon SCB X Public is expected to generate 1.38 times more return on investment than TPI Polene. However, SCB X is 1.38 times more volatile than TPI Polene Power. It trades about 0.06 of its potential returns per unit of risk. TPI Polene Power is currently generating about 0.0 per unit of risk. If you would invest 9,380 in SCB X Public on August 27, 2024 and sell it today you would earn a total of 2,070 from holding SCB X Public or generate 22.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.72% |
| Values | Daily Returns |
SCB X Public vs. TPI Polene Power
Performance |
| Timeline |
| SCB X Public |
| TPI Polene Power |
SCB X and TPI Polene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCB X and TPI Polene
The main advantage of trading using opposite SCB X and TPI Polene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCB X position performs unexpectedly, TPI Polene 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 TPI Polene will offset losses from the drop in TPI Polene'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 |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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