Correlation Between Sahamit Machinery and Taokaenoi Food
Can any of the company-specific risk be diversified away by investing in both Sahamit Machinery and Taokaenoi Food 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 Taokaenoi Food 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 Taokaenoi Food Marketing, you can compare the effects of market volatilities on Sahamit Machinery and Taokaenoi Food 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 Taokaenoi Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sahamit Machinery and Taokaenoi Food.
Diversification Opportunities for Sahamit Machinery and Taokaenoi Food
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sahamit and Taokaenoi is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Sahamit Machinery Public and Taokaenoi Food Marketing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taokaenoi Food Marketing 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 Taokaenoi Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taokaenoi Food Marketing has no effect on the direction of Sahamit Machinery i.e., Sahamit Machinery and Taokaenoi Food go up and down completely randomly.
Pair Corralation between Sahamit Machinery and Taokaenoi Food
Assuming the 90 days trading horizon Sahamit Machinery Public is expected to under-perform the Taokaenoi Food. But the stock apears to be less risky and, when comparing its historical volatility, Sahamit Machinery Public is 2.95 times less risky than Taokaenoi Food. The stock trades about -0.16 of its potential returns per unit of risk. The Taokaenoi Food Marketing is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 800.00 in Taokaenoi Food Marketing on October 20, 2024 and sell it today you would earn a total of 25.00 from holding Taokaenoi Food Marketing or generate 3.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sahamit Machinery Public vs. Taokaenoi Food Marketing
Performance |
| Timeline |
| Sahamit Machinery Public |
| Taokaenoi Food Marketing |
Sahamit Machinery and Taokaenoi Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sahamit Machinery and Taokaenoi Food
The main advantage of trading using opposite Sahamit Machinery and Taokaenoi Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sahamit Machinery position performs unexpectedly, Taokaenoi Food 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 Taokaenoi Food will offset losses from the drop in Taokaenoi Food's long position.| Sahamit Machinery vs. Super Energy | Sahamit Machinery vs. RPCG Public | Sahamit Machinery vs. Thoresen Thai Agencies | Sahamit Machinery vs. Precious Shipping Public |
| Taokaenoi Food vs. CP ALL Public | Taokaenoi Food vs. Carabao Group Public | Taokaenoi Food vs. Thai Union Group | Taokaenoi Food vs. Minor International Public |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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