Correlation Between Simple Mart and Shin Ruenn

Can any of the company-specific risk be diversified away by investing in both Simple Mart and Shin Ruenn 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 Simple Mart and Shin Ruenn into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Simple Mart Retail and Shin Ruenn Development, you can compare the effects of market volatilities on Simple Mart and Shin Ruenn 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 Simple Mart with a short position of Shin Ruenn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simple Mart and Shin Ruenn.

Diversification Opportunities for Simple Mart and Shin Ruenn

-0.27

Correlation Coefficient

Simple Mart  Shin Ruenn

Very good diversification

The 3 months correlation between Simple and Shin is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Simple Mart Retail and Shin Ruenn Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shin Ruenn Development and Simple Mart 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 Simple Mart Retail are associated (or correlated) with Shin Ruenn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shin Ruenn Development has no effect on the direction of Simple Mart i.e., Simple Mart and Shin Ruenn go up and down completely randomly.

Pair Corralation between Simple Mart and Shin Ruenn

Assuming the 90 days trading horizon Simple Mart Retail is expected to under-perform the Shin Ruenn. But the stock apears to be less risky and, when comparing its historical volatility, Simple Mart Retail is 2.12 times less risky than Shin Ruenn. The stock trades about -0.29 of its potential returns per unit of risk. The Shin Ruenn Development is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  6,180  in Shin Ruenn Development on October 10, 2024 and sell it today you would lose (70.00) from holding Shin Ruenn Development or give up 1.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Simple Mart Retail  vs.  Shin Ruenn Development

Simple Mart Retail

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Simple Mart Retail has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Simple Mart is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Shin Ruenn Development

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shin Ruenn Development has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Shin Ruenn is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Simple Mart and Shin Ruenn

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

The idea behind Simple Mart Retail and Shin Ruenn Development 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.