Correlation Between Sri Trang and United Palm
Can any of the company-specific risk be diversified away by investing in both Sri Trang and United Palm 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 United Palm 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 United Palm Oil, you can compare the effects of market volatilities on Sri Trang and United Palm 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 United Palm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sri Trang and United Palm.
Diversification Opportunities for Sri Trang and United Palm
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sri and United is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sri Trang Agro Industry and United Palm Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Palm Oil 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 United Palm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Palm Oil has no effect on the direction of Sri Trang i.e., Sri Trang and United Palm go up and down completely randomly.
Pair Corralation between Sri Trang and United Palm
Assuming the 90 days trading horizon Sri Trang Agro Industry is expected to under-perform the United Palm. In addition to that, Sri Trang is 2.27 times more volatile than United Palm Oil. It trades about -0.17 of its total potential returns per unit of risk. United Palm Oil is currently generating about 0.06 per unit of volatility. If you would invest 650.00 in United Palm Oil on August 24, 2024 and sell it today you would earn a total of 10.00 from holding United Palm Oil or generate 1.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Sri Trang Agro Industry vs. United Palm Oil
Performance |
| Timeline |
| Sri Trang Agro |
| United Palm Oil |
Sri Trang and United Palm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sri Trang and United Palm
The main advantage of trading using opposite Sri Trang and United Palm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sri Trang position performs unexpectedly, United Palm 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 United Palm will offset losses from the drop in United Palm'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 |
| United Palm vs. Univanich Palm Oil | United Palm vs. Chumporn Palm Oil | United Palm vs. Lam Soon Public | United Palm vs. United Paper 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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