Correlation Between Thai Rubber and SRI TRANG
Can any of the company-specific risk be diversified away by investing in both Thai Rubber 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 Thai Rubber and SRI TRANG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thai Rubber Latex and SRI TRANG GLOVES, you can compare the effects of market volatilities on Thai Rubber 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 Thai Rubber with a short position of SRI TRANG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Rubber and SRI TRANG.
Diversification Opportunities for Thai Rubber and SRI TRANG
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Thai and SRI is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Thai Rubber Latex and SRI TRANG GLOVES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SRI TRANG GLOVES and Thai Rubber 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 Thai Rubber Latex 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 GLOVES has no effect on the direction of Thai Rubber i.e., Thai Rubber and SRI TRANG go up and down completely randomly.
Pair Corralation between Thai Rubber and SRI TRANG
Assuming the 90 days trading horizon Thai Rubber Latex is expected to under-perform the SRI TRANG. But the stock apears to be less risky and, when comparing its historical volatility, Thai Rubber Latex is 2.79 times less risky than SRI TRANG. The stock trades about -0.11 of its potential returns per unit of risk. The SRI TRANG GLOVES is currently generating about 0.27 of returns per unit of risk over similar time horizon. 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 |
Thai Rubber Latex vs. SRI TRANG GLOVES
Performance |
| Timeline |
| Thai Rubber Latex |
| SRI TRANG GLOVES |
Thai Rubber and SRI TRANG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Rubber and SRI TRANG
The main advantage of trading using opposite Thai Rubber and SRI TRANG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Rubber 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.| Thai Rubber vs. Thanachart Capital Public | Thai Rubber vs. T S Flour | Thai Rubber vs. Ubis Public | Thai Rubber vs. Thai Vegetable Oil |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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