Correlation Between SRI TRANG and AEON Thana
Can any of the company-specific risk be diversified away by investing in both SRI TRANG and AEON Thana 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 AEON Thana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SRI TRANG GLOVES and AEON Thana Sinsap, you can compare the effects of market volatilities on SRI TRANG and AEON Thana 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 AEON Thana. Check out your portfolio center. Please also check ongoing floating volatility patterns of SRI TRANG and AEON Thana.
Diversification Opportunities for SRI TRANG and AEON Thana
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SRI and AEON is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding SRI TRANG GLOVES and AEON Thana Sinsap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEON Thana Sinsap 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 GLOVES are associated (or correlated) with AEON Thana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEON Thana Sinsap has no effect on the direction of SRI TRANG i.e., SRI TRANG and AEON Thana go up and down completely randomly.
Pair Corralation between SRI TRANG and AEON Thana
Assuming the 90 days trading horizon SRI TRANG GLOVES is expected to generate 3.82 times more return on investment than AEON Thana. However, SRI TRANG is 3.82 times more volatile than AEON Thana Sinsap. It trades about 0.27 of its potential returns per unit of risk. AEON Thana Sinsap is currently generating about -0.19 per unit of risk. If you would invest 746.00 in SRI TRANG GLOVES on September 5, 2024 and sell it today you would earn a total of 344.00 from holding SRI TRANG GLOVES or generate 46.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SRI TRANG GLOVES vs. AEON Thana Sinsap
Performance |
| Timeline |
| SRI TRANG GLOVES |
| AEON Thana Sinsap |
SRI TRANG and AEON Thana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SRI TRANG and AEON Thana
The main advantage of trading using opposite SRI TRANG and AEON Thana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SRI TRANG position performs unexpectedly, AEON Thana 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 AEON Thana will offset losses from the drop in AEON Thana's long position.| SRI TRANG vs. Thai Rubber Latex | SRI TRANG vs. Central Retail | SRI TRANG vs. Bangkok Sheet Metal | SRI TRANG vs. PMC LABEL MATERIALS |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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