Correlation Between Sahamit Machinery and Nova Organic
Can any of the company-specific risk be diversified away by investing in both Sahamit Machinery and Nova Organic 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 Sahamit Machinery and Nova Organic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sahamit Machinery Public and Nova Organic PCL, you can compare the effects of market volatilities on Sahamit Machinery and Nova Organic 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 Sahamit Machinery with a short position of Nova Organic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sahamit Machinery and Nova Organic.
Diversification Opportunities for Sahamit Machinery and Nova Organic
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sahamit and Nova is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Sahamit Machinery Public and Nova Organic PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nova Organic PCL and Sahamit Machinery 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 Sahamit Machinery Public are associated (or correlated) with Nova Organic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nova Organic PCL has no effect on the direction of Sahamit Machinery i.e., Sahamit Machinery and Nova Organic go up and down completely randomly.
Pair Corralation between Sahamit Machinery and Nova Organic
Assuming the 90 days trading horizon Sahamit Machinery Public is expected to generate 13.54 times more return on investment than Nova Organic. However, Sahamit Machinery is 13.54 times more volatile than Nova Organic PCL. It trades about 0.04 of its potential returns per unit of risk. Nova Organic PCL is currently generating about -0.04 per unit of risk. If you would invest 442.00 in Sahamit Machinery Public on September 14, 2024 and sell it today you would lose (40.00) from holding Sahamit Machinery Public or give up 9.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sahamit Machinery Public vs. Nova Organic PCL
Performance |
| Timeline |
| Sahamit Machinery Public |
| Nova Organic PCL |
Sahamit Machinery and Nova Organic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sahamit Machinery and Nova Organic
The main advantage of trading using opposite Sahamit Machinery and Nova Organic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sahamit Machinery position performs unexpectedly, Nova Organic 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 Nova Organic will offset losses from the drop in Nova Organic's long position.| Sahamit Machinery vs. MCS Steel Public | Sahamit Machinery vs. Somboon Advance Technology | Sahamit Machinery vs. Lohakit Metal Public | Sahamit Machinery vs. SNC Former 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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