Correlation Between LIFE + and SANOK RUBBER

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

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

Diversification Opportunities for LIFE + and SANOK RUBBER

0.61

Correlation Coefficient

LIFE +  SANOK RUBBER

Poor diversification

The 3 months correlation between LIFE and SANOK is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding LIFE BANC SPLIT and SANOK RUBBER ZY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SANOK RUBBER ZY and LIFE + 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 LIFE BANC SPLIT are associated (or correlated) with SANOK RUBBER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SANOK RUBBER ZY has no effect on the direction of LIFE + i.e., LIFE + and SANOK RUBBER go up and down completely randomly.

Pair Corralation between LIFE + and SANOK RUBBER

Assuming the 90 days horizon LIFE BANC SPLIT is expected to generate 0.68 times more return on investment than SANOK RUBBER. However, LIFE BANC SPLIT is 1.46 times less risky than SANOK RUBBER. It trades about 0.17 of its potential returns per unit of risk. SANOK RUBBER ZY is currently generating about 0.11 per unit of risk. If you would invest  492.00  in LIFE BANC SPLIT on August 31, 2024 and sell it today you would earn a total of  148.00  from holding LIFE BANC SPLIT or generate 30.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.46%
Values	Daily Returns

LIFE BANC SPLIT  vs.  SANOK RUBBER ZY

LIFE BANC SPLIT

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in LIFE BANC SPLIT are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, LIFE + reported solid returns over the last few months and may actually be approaching a breakup point.

SANOK RUBBER ZY

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SANOK RUBBER ZY are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, SANOK RUBBER reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LIFE + and SANOK RUBBER

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

The idea behind LIFE BANC SPLIT and SANOK RUBBER ZY 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.