Correlation Between SCG Packaging and Berli Jucker
Can any of the company-specific risk be diversified away by investing in both SCG Packaging and Berli Jucker 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 Berli Jucker into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCG Packaging Public and Berli Jucker Public, you can compare the effects of market volatilities on SCG Packaging and Berli Jucker 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 Berli Jucker. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCG Packaging and Berli Jucker.
Diversification Opportunities for SCG Packaging and Berli Jucker
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SCG and Berli is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding SCG Packaging Public and Berli Jucker Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berli Jucker Public 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 Public are associated (or correlated) with Berli Jucker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berli Jucker Public has no effect on the direction of SCG Packaging i.e., SCG Packaging and Berli Jucker go up and down completely randomly.
Pair Corralation between SCG Packaging and Berli Jucker
Assuming the 90 days trading horizon SCG Packaging Public is expected to generate 23.91 times more return on investment than Berli Jucker. However, SCG Packaging is 23.91 times more volatile than Berli Jucker Public. It trades about 0.04 of its potential returns per unit of risk. Berli Jucker Public is currently generating about -0.02 per unit of risk. If you would invest 5,518 in SCG Packaging Public on September 3, 2024 and sell it today you would lose (3,378) from holding SCG Packaging Public or give up 61.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCG Packaging Public vs. Berli Jucker Public
Performance |
| Timeline |
| SCG Packaging Public |
| Berli Jucker Public |
SCG Packaging and Berli Jucker Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCG Packaging and Berli Jucker
The main advantage of trading using opposite SCG Packaging and Berli Jucker positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCG Packaging position performs unexpectedly, Berli Jucker 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 Berli Jucker will offset losses from the drop in Berli Jucker's long position.| SCG Packaging vs. AJ Plast Public | SCG Packaging vs. Thai Metal Drum | SCG Packaging vs. Thantawan Industry Public | SCG Packaging vs. Thai Film Industries |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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