Correlation Between Surapon Foods and Sri Trang
Can any of the company-specific risk be diversified away by investing in both Surapon Foods and Sri Trang 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 Sri Trang 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 Sri Trang Agro Industry, you can compare the effects of market volatilities on Surapon Foods and Sri Trang 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 Sri Trang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Surapon Foods and Sri Trang.
Diversification Opportunities for Surapon Foods and Sri Trang
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Surapon and Sri is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Surapon Foods Public and Sri Trang Agro Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sri Trang Agro 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 Sri Trang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sri Trang Agro has no effect on the direction of Surapon Foods i.e., Surapon Foods and Sri Trang go up and down completely randomly.
Pair Corralation between Surapon Foods and Sri Trang
Assuming the 90 days trading horizon Surapon Foods Public is expected to generate 0.32 times more return on investment than Sri Trang. However, Surapon Foods Public is 3.16 times less risky than Sri Trang. It trades about 0.04 of its potential returns per unit of risk. Sri Trang Agro Industry is currently generating about -0.16 per unit of risk. If you would invest 690.00 in Surapon Foods Public on August 27, 2024 and sell it today you would earn a total of 5.00 from holding Surapon Foods Public or generate 0.72% 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. Sri Trang Agro Industry
Performance |
| Timeline |
| Surapon Foods Public |
| Sri Trang Agro |
Surapon Foods and Sri Trang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Surapon Foods and Sri Trang
The main advantage of trading using opposite Surapon Foods and Sri Trang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Surapon Foods position performs unexpectedly, Sri Trang 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 Sri Trang will offset losses from the drop in Sri Trang's long position.The idea behind Surapon Foods Public and Sri Trang Agro Industry pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Sri Trang vs. SCB X Public | Sri Trang vs. Kasikornbank Public | Sri Trang vs. PTT Public | Sri Trang vs. Kasikornbank 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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