Correlation Between SCG PACKAGING and Tong Hua
Can any of the company-specific risk be diversified away by investing in both SCG PACKAGING and Tong Hua 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 SCG PACKAGING and Tong Hua into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCG PACKAGING PCL NVDR and Tong Hua Holding, you can compare the effects of market volatilities on SCG PACKAGING and Tong Hua 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 SCG PACKAGING with a short position of Tong Hua. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCG PACKAGING and Tong Hua.
Diversification Opportunities for SCG PACKAGING and Tong Hua
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SCG and Tong is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding SCG PACKAGING PCL NVDR and Tong Hua Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tong Hua Holding and SCG PACKAGING 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 SCG PACKAGING PCL NVDR are associated (or correlated) with Tong Hua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tong Hua Holding has no effect on the direction of SCG PACKAGING i.e., SCG PACKAGING and Tong Hua go up and down completely randomly.
Pair Corralation between SCG PACKAGING and Tong Hua
Assuming the 90 days trading horizon SCG PACKAGING PCL NVDR is expected to under-perform the Tong Hua. In addition to that, SCG PACKAGING is 2.54 times more volatile than Tong Hua Holding. It trades about -0.26 of its total potential returns per unit of risk. Tong Hua Holding is currently generating about -0.42 per unit of volatility. If you would invest 101.00 in Tong Hua Holding on September 1, 2024 and sell it today you would lose (28.00) from holding Tong Hua Holding or give up 27.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
SCG PACKAGING PCL NVDR vs. Tong Hua Holding
Performance |
| Timeline |
| SCG PACKAGING PCL |
| Tong Hua Holding |
SCG PACKAGING and Tong Hua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCG PACKAGING and Tong Hua
The main advantage of trading using opposite SCG PACKAGING and Tong Hua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCG PACKAGING position performs unexpectedly, Tong Hua 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 Tong Hua will offset losses from the drop in Tong Hua's long position.| SCG PACKAGING vs. PTT Public | SCG PACKAGING vs. Kasikornbank Public | SCG PACKAGING vs. The Siam Cement | SCG PACKAGING vs. OSOTSPA PCL NVDR |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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