Correlation Between Sri Trang and SCB X
Can any of the company-specific risk be diversified away by investing in both Sri Trang and SCB X 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 SCB X 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 SCB X Public, you can compare the effects of market volatilities on Sri Trang and SCB X 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 SCB X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sri Trang and SCB X.
Diversification Opportunities for Sri Trang and SCB X
Excellent diversification
The 3 months correlation between Sri and SCB is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Sri Trang Agro Industry and SCB X Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCB X 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 SCB X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCB X Public has no effect on the direction of Sri Trang i.e., Sri Trang and SCB X go up and down completely randomly.
Pair Corralation between Sri Trang and SCB X
Assuming the 90 days trading horizon Sri Trang Agro Industry is expected to under-perform the SCB X. In addition to that, Sri Trang is 4.24 times more volatile than SCB X Public. It trades about -0.17 of its total potential returns per unit of risk. SCB X Public is currently generating about 0.13 per unit of volatility. If you would invest 11,200 in SCB X Public on August 31, 2024 and sell it today you would earn a total of 200.00 from holding SCB X Public or generate 1.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sri Trang Agro Industry vs. SCB X Public
Performance |
| Timeline |
| Sri Trang Agro |
| SCB X Public |
Sri Trang and SCB X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sri Trang and SCB X
The main advantage of trading using opposite Sri Trang and SCB X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sri Trang position performs unexpectedly, SCB X 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 SCB X will offset losses from the drop in SCB X'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 |
| SCB X vs. Bangkok Dusit Medical | SCB X vs. Bank of Ayudhya | SCB X vs. KTBST Mixed Leasehold | SCB X vs. TISCO Financial Group |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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