Correlation Between TWOWAY Communications and Shin Ruenn

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

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

Diversification Opportunities for TWOWAY Communications and Shin Ruenn

-0.57

Correlation Coefficient

TWOWAY Communications  Shin Ruenn

Excellent diversification

The 3 months correlation between TWOWAY and Shin is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding TWOWAY Communications 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 TWOWAY Communications 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 TWOWAY Communications 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 TWOWAY Communications i.e., TWOWAY Communications and Shin Ruenn go up and down completely randomly.

Pair Corralation between TWOWAY Communications and Shin Ruenn

Assuming the 90 days trading horizon TWOWAY Communications is expected to generate 2.21 times more return on investment than Shin Ruenn. However, TWOWAY Communications is 2.21 times more volatile than Shin Ruenn Development. It trades about 0.05 of its potential returns per unit of risk. Shin Ruenn Development is currently generating about -0.02 per unit of risk. If you would invest  11,400  in TWOWAY Communications on October 24, 2024 and sell it today you would earn a total of  900.00  from holding TWOWAY Communications or generate 7.89% return on investment over 90 days.

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

TWOWAY Communications  vs.  Shin Ruenn Development

TWOWAY Communications

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TWOWAY Communications are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, TWOWAY Communications showed solid returns over the last few months and may actually be approaching a breakup point.

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 TWOWAY Communications and Shin Ruenn

The main advantage of trading using opposite TWOWAY Communications and Shin Ruenn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TWOWAY Communications 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 TWOWAY Communications 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.