Correlation Between TOA PAINT and Sri Trang
Can any of the company-specific risk be diversified away by investing in both TOA PAINT and Sri Trang 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 TOA PAINT and Sri Trang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TOA PAINT and Sri Trang Agro Industry, you can compare the effects of market volatilities on TOA PAINT and Sri Trang 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 TOA PAINT with a short position of Sri Trang. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOA PAINT and Sri Trang.
Diversification Opportunities for TOA PAINT and Sri Trang
Poor diversification
The 3 months correlation between TOA and Sri is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding TOA PAINT and Sri Trang Agro Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sri Trang Agro and TOA PAINT 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 TOA PAINT are associated (or correlated) with Sri Trang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sri Trang Agro has no effect on the direction of TOA PAINT i.e., TOA PAINT and Sri Trang go up and down completely randomly.
Pair Corralation between TOA PAINT and Sri Trang
Assuming the 90 days trading horizon TOA PAINT is expected to under-perform the Sri Trang. But the stock apears to be less risky and, when comparing its historical volatility, TOA PAINT is 1.27 times less risky than Sri Trang. The stock trades about -0.31 of its potential returns per unit of risk. The Sri Trang Agro Industry is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,540 in Sri Trang Agro Industry on December 4, 2024 and sell it today you would lose (10.00) from holding Sri Trang Agro Industry or give up 0.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TOA PAINT vs. Sri Trang Agro Industry
Performance |
| Timeline |
| TOA PAINT |
| Sri Trang Agro |
TOA PAINT and Sri Trang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TOA PAINT and Sri Trang
The main advantage of trading using opposite TOA PAINT and Sri Trang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOA PAINT position performs unexpectedly, Sri Trang 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 Sri Trang will offset losses from the drop in Sri Trang's long position.| TOA PAINT vs. CENTRAL RETAIL P | TOA PAINT vs. SRINANAPORN MARKETING | TOA PAINT vs. AAPICO Hitech Public | TOA PAINT vs. Tanachira Retail |
| Sri Trang vs. Sri Trang Gloves | Sri Trang vs. Charoen Pokphand Foods | Sri Trang vs. Thai Union Group | Sri Trang vs. The Siam Cement |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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