Correlation Between Areeya Property and Supalai Public

Can any of the company-specific risk be diversified away by investing in both Areeya Property and Supalai Public 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 Areeya Property and Supalai Public into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Areeya Property Public and Supalai Public, you can compare the effects of market volatilities on Areeya Property and Supalai Public 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 Areeya Property with a short position of Supalai Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Areeya Property and Supalai Public.

Diversification Opportunities for Areeya Property and Supalai Public

0.29

Correlation Coefficient

Areeya Property  Supalai Public

Modest diversification

The 3 months correlation between Areeya and Supalai is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Areeya Property Public and Supalai Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supalai Public and Areeya Property 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 Areeya Property Public are associated (or correlated) with Supalai Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supalai Public has no effect on the direction of Areeya Property i.e., Areeya Property and Supalai Public go up and down completely randomly.

Pair Corralation between Areeya Property and Supalai Public

Given the investment horizon of 90 days Areeya Property is expected to generate 1.99 times less return on investment than Supalai Public. But when comparing it to its historical volatility, Areeya Property Public is 1.41 times less risky than Supalai Public. It trades about 0.04 of its potential returns per unit of risk. Supalai Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  2,481  in Supalai Public on September 24, 2024 and sell it today you would lose (731.00) from holding Supalai Public or give up 29.46% of portfolio value over 90 days.

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

Areeya Property Public  vs.  Supalai Public

Areeya Property Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Areeya Property Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, Areeya Property is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Supalai Public

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Supalai Public are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting essential indicators, Supalai Public reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Areeya Property and Supalai Public

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

The idea behind Areeya Property Public and Supalai Public 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.

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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.