Correlation Between Sri Trang and Peoples Garment
Can any of the company-specific risk be diversified away by investing in both Sri Trang and Peoples Garment 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 Peoples Garment 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 Peoples Garment Public, you can compare the effects of market volatilities on Sri Trang and Peoples Garment 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 Peoples Garment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sri Trang and Peoples Garment.
Diversification Opportunities for Sri Trang and Peoples Garment
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sri and Peoples is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Sri Trang Agro Industry and Peoples Garment Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peoples Garment 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 Peoples Garment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peoples Garment Public has no effect on the direction of Sri Trang i.e., Sri Trang and Peoples Garment go up and down completely randomly.
Pair Corralation between Sri Trang and Peoples Garment
Assuming the 90 days trading horizon Sri Trang Agro Industry is expected to under-perform the Peoples Garment. In addition to that, Sri Trang is 7.37 times more volatile than Peoples Garment Public. It trades about -0.16 of its total potential returns per unit of risk. Peoples Garment Public is currently generating about -0.07 per unit of volatility. If you would invest 900.00 in Peoples Garment Public on August 27, 2024 and sell it today you would lose (5.00) from holding Peoples Garment Public or give up 0.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sri Trang Agro Industry vs. Peoples Garment Public
Performance |
| Timeline |
| Sri Trang Agro |
| Peoples Garment Public |
Sri Trang and Peoples Garment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sri Trang and Peoples Garment
The main advantage of trading using opposite Sri Trang and Peoples Garment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sri Trang position performs unexpectedly, Peoples Garment 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 Peoples Garment will offset losses from the drop in Peoples Garment's long position.| Sri Trang vs. SCB X Public | Sri Trang vs. Kasikornbank Public | Sri Trang vs. PTT Public | Sri Trang vs. Kasikornbank Public |
| Peoples Garment vs. SCB X Public | Peoples Garment vs. Kasikornbank Public | Peoples Garment vs. PTT Public | Peoples Garment 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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