Correlation Between SCG PACKAGING and Yong Concrete
Can any of the company-specific risk be diversified away by investing in both SCG PACKAGING and Yong Concrete 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 Yong Concrete 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 Yong Concrete PCL, you can compare the effects of market volatilities on SCG PACKAGING and Yong Concrete 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 Yong Concrete. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCG PACKAGING and Yong Concrete.
Diversification Opportunities for SCG PACKAGING and Yong Concrete
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SCG and Yong is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding SCG PACKAGING PCL NVDR and Yong Concrete PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yong Concrete PCL 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 Yong Concrete. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yong Concrete PCL has no effect on the direction of SCG PACKAGING i.e., SCG PACKAGING and Yong Concrete go up and down completely randomly.
Pair Corralation between SCG PACKAGING and Yong Concrete
Assuming the 90 days trading horizon SCG PACKAGING PCL NVDR is expected to under-perform the Yong Concrete. But the stock apears to be less risky and, when comparing its historical volatility, SCG PACKAGING PCL NVDR is 1.4 times less risky than Yong Concrete. The stock trades about -0.08 of its potential returns per unit of risk. The Yong Concrete PCL is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 204.00 in Yong Concrete PCL on August 30, 2024 and sell it today you would lose (83.00) from holding Yong Concrete PCL or give up 40.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCG PACKAGING PCL NVDR vs. Yong Concrete PCL
Performance |
| Timeline |
| SCG PACKAGING PCL |
| Yong Concrete PCL |
SCG PACKAGING and Yong Concrete Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCG PACKAGING and Yong Concrete
The main advantage of trading using opposite SCG PACKAGING and Yong Concrete positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCG PACKAGING position performs unexpectedly, Yong Concrete 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 Yong Concrete will offset losses from the drop in Yong Concrete's long position.| SCG PACKAGING vs. Quality Houses Hotel | SCG PACKAGING vs. Quality Houses Property | SCG PACKAGING vs. CK Power Public | SCG PACKAGING vs. Thai Metal Drum |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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