Correlation Between Sri Trang and Ngern Tid
Can any of the company-specific risk be diversified away by investing in both Sri Trang and Ngern Tid 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 Ngern Tid 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 Ngern Tid Lor, you can compare the effects of market volatilities on Sri Trang and Ngern Tid 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 Ngern Tid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sri Trang and Ngern Tid.
Diversification Opportunities for Sri Trang and Ngern Tid
Modest diversification
The 3 months correlation between Sri and Ngern is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Sri Trang Gloves and Ngern Tid Lor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ngern Tid Lor 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 Ngern Tid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ngern Tid Lor has no effect on the direction of Sri Trang i.e., Sri Trang and Ngern Tid go up and down completely randomly.
Pair Corralation between Sri Trang and Ngern Tid
Assuming the 90 days trading horizon Sri Trang is expected to generate 22.5 times less return on investment than Ngern Tid. But when comparing it to its historical volatility, Sri Trang Gloves is 17.79 times less risky than Ngern Tid. It trades about 0.04 of its potential returns per unit of risk. Ngern Tid Lor is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,546 in Ngern Tid Lor on August 31, 2024 and sell it today you would lose (786.00) from holding Ngern Tid Lor or give up 30.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Sri Trang Gloves vs. Ngern Tid Lor
Performance |
| Timeline |
| Sri Trang Gloves |
| Ngern Tid Lor |
Sri Trang and Ngern Tid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sri Trang and Ngern Tid
The main advantage of trading using opposite Sri Trang and Ngern Tid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sri Trang position performs unexpectedly, Ngern Tid 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 Ngern Tid will offset losses from the drop in Ngern Tid's long position.| Sri Trang vs. Sri Trang Agro Industry | Sri Trang vs. Charoen Pokphand Foods | Sri Trang vs. Kasikornbank Public | Sri Trang vs. Bangkok Dusit Medical |
| Ngern Tid vs. East Coast Furnitech | Ngern Tid vs. Filter Vision Public | Ngern Tid vs. Cho Thavee Public | Ngern Tid vs. Akkhie Prakarn 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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