Correlation Between Singer Thailand and Hana Microelectronics
Can any of the company-specific risk be diversified away by investing in both Singer Thailand and Hana Microelectronics 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 Singer Thailand and Hana Microelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Singer Thailand Public and Hana Microelectronics Public, you can compare the effects of market volatilities on Singer Thailand and Hana Microelectronics 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 Singer Thailand with a short position of Hana Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singer Thailand and Hana Microelectronics.
Diversification Opportunities for Singer Thailand and Hana Microelectronics
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Singer and Hana is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Singer Thailand Public and Hana Microelectronics Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hana Microelectronics and Singer Thailand 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 Singer Thailand Public are associated (or correlated) with Hana Microelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hana Microelectronics has no effect on the direction of Singer Thailand i.e., Singer Thailand and Hana Microelectronics go up and down completely randomly.
Pair Corralation between Singer Thailand and Hana Microelectronics
Assuming the 90 days trading horizon Singer Thailand Public is expected to generate 0.7 times more return on investment than Hana Microelectronics. However, Singer Thailand Public is 1.42 times less risky than Hana Microelectronics. It trades about -0.38 of its potential returns per unit of risk. Hana Microelectronics Public is currently generating about -0.32 per unit of risk. If you would invest 1,090 in Singer Thailand Public on August 28, 2024 and sell it today you would lose (220.00) from holding Singer Thailand Public or give up 20.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Singer Thailand Public vs. Hana Microelectronics Public
Performance |
| Timeline |
| Singer Thailand Public |
| Hana Microelectronics |
Singer Thailand and Hana Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singer Thailand and Hana Microelectronics
The main advantage of trading using opposite Singer Thailand and Hana Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singer Thailand position performs unexpectedly, Hana Microelectronics 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 Hana Microelectronics will offset losses from the drop in Hana Microelectronics' long position.| Singer Thailand vs. SCB X Public | Singer Thailand vs. Kasikornbank Public | Singer Thailand vs. PTT Public | Singer Thailand vs. Kasikornbank Public |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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