Correlation Between Sri Trang and Central Pattana
Can any of the company-specific risk be diversified away by investing in both Sri Trang and Central Pattana 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 Sri Trang and Central Pattana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sri Trang Agro Industry and Central Pattana Public, you can compare the effects of market volatilities on Sri Trang and Central Pattana 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 Sri Trang with a short position of Central Pattana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sri Trang and Central Pattana.
Diversification Opportunities for Sri Trang and Central Pattana
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sri and Central is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Sri Trang Agro Industry and Central Pattana Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Pattana Public and Sri Trang 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 Sri Trang Agro Industry are associated (or correlated) with Central Pattana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Pattana Public has no effect on the direction of Sri Trang i.e., Sri Trang and Central Pattana go up and down completely randomly.
Pair Corralation between Sri Trang and Central Pattana
Assuming the 90 days trading horizon Sri Trang Agro Industry is expected to generate 2.02 times more return on investment than Central Pattana. However, Sri Trang is 2.02 times more volatile than Central Pattana Public. It trades about 0.06 of its potential returns per unit of risk. Central Pattana Public is currently generating about -0.01 per unit of risk. If you would invest 1,420 in Sri Trang Agro Industry on September 4, 2024 and sell it today you would earn a total of 500.00 from holding Sri Trang Agro Industry or generate 35.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sri Trang Agro Industry vs. Central Pattana Public
Performance |
| Timeline |
| Sri Trang Agro |
| Central Pattana Public |
Sri Trang and Central Pattana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sri Trang and Central Pattana
The main advantage of trading using opposite Sri Trang and Central Pattana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sri Trang position performs unexpectedly, Central Pattana 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 Central Pattana will offset losses from the drop in Central Pattana's long position.| Sri Trang vs. Central Pattana Public | Sri Trang vs. CP ALL Public | Sri Trang vs. Bangkok Dusit Medical | Sri Trang vs. Airports of Thailand |
| Central Pattana vs. CP ALL Public | Central Pattana vs. Bangkok Dusit Medical | Central Pattana vs. Airports of Thailand | Central Pattana vs. Advanced Info Service |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Stocks Directory Find actively traded stocks across global markets |