Correlation Between United Palm and Sri Trang
Can any of the company-specific risk be diversified away by investing in both United Palm 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 United Palm and Sri Trang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Palm Oil and Sri Trang Agro Industry, you can compare the effects of market volatilities on United Palm 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 United Palm with a short position of Sri Trang. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Palm and Sri Trang.
Diversification Opportunities for United Palm and Sri Trang
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between United and Sri is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding United Palm Oil 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 United Palm 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 United Palm Oil 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 United Palm i.e., United Palm and Sri Trang go up and down completely randomly.
Pair Corralation between United Palm and Sri Trang
Assuming the 90 days trading horizon United Palm Oil is expected to generate 0.46 times more return on investment than Sri Trang. However, United Palm Oil is 2.17 times less risky than Sri Trang. It trades about 0.03 of its potential returns per unit of risk. Sri Trang Agro Industry is currently generating about -0.16 per unit of risk. If you would invest 650.00 in United Palm Oil on August 27, 2024 and sell it today you would earn a total of 5.00 from holding United Palm Oil or generate 0.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Palm Oil vs. Sri Trang Agro Industry
Performance |
| Timeline |
| United Palm Oil |
| Sri Trang Agro |
United Palm and Sri Trang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Palm and Sri Trang
The main advantage of trading using opposite United Palm and Sri Trang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Palm 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.| United Palm vs. Univanich Palm Oil | United Palm vs. Chumporn Palm Oil | United Palm vs. Lam Soon Public | United Palm vs. United Paper Public |
| Sri Trang vs. SCB X Public | Sri Trang vs. Kasikornbank Public | Sri Trang vs. PTT Public | Sri Trang vs. Kasikornbank 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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