Correlation Between SANOK RUBBER and THORNEY TECHS

Can any of the company-specific risk be diversified away by investing in both SANOK RUBBER and THORNEY TECHS 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 SANOK RUBBER and THORNEY TECHS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SANOK RUBBER ZY and THORNEY TECHS LTD, you can compare the effects of market volatilities on SANOK RUBBER and THORNEY TECHS 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 SANOK RUBBER with a short position of THORNEY TECHS. Check out your portfolio center. Please also check ongoing floating volatility patterns of SANOK RUBBER and THORNEY TECHS.

Diversification Opportunities for SANOK RUBBER and THORNEY TECHS

-0.46

Correlation Coefficient

SANOK RUBBER  THORNEY TECHS

Very good diversification

The 3 months correlation between SANOK and THORNEY is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding SANOK RUBBER ZY and THORNEY TECHS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THORNEY TECHS LTD and SANOK 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 SANOK RUBBER ZY are associated (or correlated) with THORNEY TECHS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THORNEY TECHS LTD has no effect on the direction of SANOK RUBBER i.e., SANOK RUBBER and THORNEY TECHS go up and down completely randomly.

Pair Corralation between SANOK RUBBER and THORNEY TECHS

Assuming the 90 days horizon SANOK RUBBER ZY is expected to generate 0.34 times more return on investment than THORNEY TECHS. However, SANOK RUBBER ZY is 2.94 times less risky than THORNEY TECHS. It trades about 0.5 of its potential returns per unit of risk. THORNEY TECHS LTD is currently generating about -0.09 per unit of risk. If you would invest  439.00  in SANOK RUBBER ZY on October 5, 2024 and sell it today you would earn a total of  64.00  from holding SANOK RUBBER ZY or generate 14.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

SANOK RUBBER ZY  vs.  THORNEY TECHS LTD

SANOK RUBBER ZY

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days SANOK RUBBER ZY has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, SANOK RUBBER may actually be approaching a critical reversion point that can send shares even higher in February 2025.

THORNEY TECHS LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days THORNEY TECHS LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, THORNEY TECHS is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with SANOK RUBBER and THORNEY TECHS

The main advantage of trading using opposite SANOK RUBBER and THORNEY TECHS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SANOK RUBBER position performs unexpectedly, THORNEY TECHS 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 THORNEY TECHS will offset losses from the drop in THORNEY TECHS's long position.

The idea behind SANOK RUBBER ZY and THORNEY TECHS LTD pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.