Correlation Between Sri Trang and Minor International
Can any of the company-specific risk be diversified away by investing in both Sri Trang and Minor International 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 Minor International 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 Minor International Public, you can compare the effects of market volatilities on Sri Trang and Minor International 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 Minor International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sri Trang and Minor International.
Diversification Opportunities for Sri Trang and Minor International
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sri and Minor is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Sri Trang Agro Industry and Minor International Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minor International 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 Minor International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minor International has no effect on the direction of Sri Trang i.e., Sri Trang and Minor International go up and down completely randomly.
Pair Corralation between Sri Trang and Minor International
Assuming the 90 days trading horizon Sri Trang Agro Industry is expected to under-perform the Minor International. In addition to that, Sri Trang is 1.39 times more volatile than Minor International Public. It trades about -0.14 of its total potential returns per unit of risk. Minor International Public is currently generating about 0.26 per unit of volatility. If you would invest 2,400 in Minor International Public on December 11, 2024 and sell it today you would earn a total of 450.00 from holding Minor International Public or generate 18.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sri Trang Agro Industry vs. Minor International Public
Performance |
| Timeline |
| Sri Trang Agro |
| Minor International |
Sri Trang and Minor International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sri Trang and Minor International
The main advantage of trading using opposite Sri Trang and Minor International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sri Trang position performs unexpectedly, Minor International 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 Minor International will offset losses from the drop in Minor International's long position.| Sri Trang vs. Sri Trang Gloves | Sri Trang vs. Charoen Pokphand Foods | Sri Trang vs. Thai Union Group | Sri Trang vs. The Siam Cement |
| Minor International vs. CP ALL Public | Minor International vs. Bangkok Dusit Medical | Minor International vs. Airports of Thailand | Minor International 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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