Correlation Between Stock Exchange and Southern Concrete
Can any of the company-specific risk be diversified away by investing in both Stock Exchange and Southern 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 Stock Exchange and Southern Concrete into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stock Exchange Of and Southern Concrete Pile, you can compare the effects of market volatilities on Stock Exchange and Southern 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 Stock Exchange with a short position of Southern Concrete. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stock Exchange and Southern Concrete.
Diversification Opportunities for Stock Exchange and Southern Concrete
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Stock and Southern is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Stock Exchange Of and Southern Concrete Pile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Concrete Pile and Stock Exchange 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 Stock Exchange Of are associated (or correlated) with Southern Concrete. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Concrete Pile has no effect on the direction of Stock Exchange i.e., Stock Exchange and Southern Concrete go up and down completely randomly.
Pair Corralation between Stock Exchange and Southern Concrete
Assuming the 90 days trading horizon Stock Exchange Of is expected to under-perform the Southern Concrete. But the index apears to be less risky and, when comparing its historical volatility, Stock Exchange Of is 3.07 times less risky than Southern Concrete. The index trades about -0.06 of its potential returns per unit of risk. The Southern Concrete Pile is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 655.00 in Southern Concrete Pile on August 25, 2024 and sell it today you would earn a total of 35.00 from holding Southern Concrete Pile or generate 5.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Stock Exchange Of vs. Southern Concrete Pile
Performance |
| Timeline |
Stock Exchange and Southern Concrete Volatility Contrast
Predicted Return Density |
| Returns |
Stock Exchange Of
Pair trading matchups for Stock Exchange
Southern Concrete Pile
Pair trading matchups for Southern Concrete
Pair Trading with Stock Exchange and Southern Concrete
The main advantage of trading using opposite Stock Exchange and Southern Concrete positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stock Exchange position performs unexpectedly, Southern 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 Southern Concrete will offset losses from the drop in Southern Concrete's long position.| Stock Exchange vs. Bank of Ayudhya | Stock Exchange vs. ABSOLUTE CLEAN ENERGY | Stock Exchange vs. DOHOME | Stock Exchange vs. Srinanaporn Marketing Public |
| Southern Concrete vs. Quality Houses Public | Southern Concrete vs. Siam City Cement | Southern Concrete vs. SC Asset | Southern Concrete vs. Siam Steel Service |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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