Correlation Between STPI Public and Better World
Can any of the company-specific risk be diversified away by investing in both STPI Public and Better World 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 STPI Public and Better World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STPI Public and Better World Green, you can compare the effects of market volatilities on STPI Public and Better World 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 STPI Public with a short position of Better World. Check out your portfolio center. Please also check ongoing floating volatility patterns of STPI Public and Better World.
Diversification Opportunities for STPI Public and Better World
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between STPI and Better is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding STPI Public and Better World Green in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Better World Green and STPI Public 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 STPI Public are associated (or correlated) with Better World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Better World Green has no effect on the direction of STPI Public i.e., STPI Public and Better World go up and down completely randomly.
Pair Corralation between STPI Public and Better World
Assuming the 90 days trading horizon STPI Public is expected to generate 13.24 times more return on investment than Better World. However, STPI Public is 13.24 times more volatile than Better World Green. It trades about 0.04 of its potential returns per unit of risk. Better World Green is currently generating about -0.06 per unit of risk. If you would invest 555.00 in STPI Public on October 24, 2024 and sell it today you would lose (255.00) from holding STPI Public or give up 45.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
STPI Public vs. Better World Green
Performance |
| Timeline |
| STPI Public |
| Better World Green |
STPI Public and Better World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STPI Public and Better World
The main advantage of trading using opposite STPI Public and Better World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STPI Public position performs unexpectedly, Better World 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 Better World will offset losses from the drop in Better World's long position.| STPI Public vs. Capital Engineering Network | STPI Public vs. Bangsaphan Barmill Public | STPI Public vs. CSP Steel Center | STPI Public vs. Chukai Public |
| Better World vs. Tipco Foods Public | Better World vs. STPI Public | Better World vs. Seafco Public | Better World vs. Tipco Asphalt 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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