Correlation Between Surapon Foods and Premier Marketing
Can any of the company-specific risk be diversified away by investing in both Surapon Foods and Premier Marketing 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 Surapon Foods and Premier Marketing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Surapon Foods Public and Premier Marketing Public, you can compare the effects of market volatilities on Surapon Foods and Premier Marketing 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 Surapon Foods with a short position of Premier Marketing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Surapon Foods and Premier Marketing.
Diversification Opportunities for Surapon Foods and Premier Marketing
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Surapon and Premier is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Surapon Foods Public and Premier Marketing Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier Marketing Public and Surapon Foods 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 Surapon Foods Public are associated (or correlated) with Premier Marketing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier Marketing Public has no effect on the direction of Surapon Foods i.e., Surapon Foods and Premier Marketing go up and down completely randomly.
Pair Corralation between Surapon Foods and Premier Marketing
Assuming the 90 days trading horizon Surapon Foods Public is expected to under-perform the Premier Marketing. But the stock apears to be less risky and, when comparing its historical volatility, Surapon Foods Public is 3.86 times less risky than Premier Marketing. The stock trades about -0.09 of its potential returns per unit of risk. The Premier Marketing Public is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 860.00 in Premier Marketing Public on August 24, 2024 and sell it today you would earn a total of 80.00 from holding Premier Marketing Public or generate 9.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Surapon Foods Public vs. Premier Marketing Public
Performance |
| Timeline |
| Surapon Foods Public |
| Premier Marketing Public |
Surapon Foods and Premier Marketing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Surapon Foods and Premier Marketing
The main advantage of trading using opposite Surapon Foods and Premier Marketing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Surapon Foods position performs unexpectedly, Premier Marketing 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 Premier Marketing will offset losses from the drop in Premier Marketing's long position.| Surapon Foods vs. CP ALL Public | Surapon Foods vs. Carabao Group Public | Surapon Foods vs. Thai Union Group | Surapon Foods vs. Minor International Public |
| Premier Marketing vs. CP ALL Public | Premier Marketing vs. Carabao Group Public | Premier Marketing vs. Thai Union Group | Premier Marketing 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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