Correlation Between Akkhie Prakarn and Yong Concrete

Can any of the company-specific risk be diversified away by investing in both Akkhie Prakarn and Yong Concrete 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 Akkhie Prakarn and Yong Concrete into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Akkhie Prakarn and Yong Concrete

0.13

Correlation Coefficient

Akkhie Prakarn  Yong Concrete

Average diversification

The 3 months correlation between Akkhie and Yong is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Akkhie Prakarn Public and Yong Concrete PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yong Concrete PCL and Akkhie Prakarn 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 Akkhie Prakarn Public are associated (or correlated) with Yong Concrete. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yong Concrete PCL has no effect on the direction of Akkhie Prakarn i.e., Akkhie Prakarn and Yong Concrete go up and down completely randomly.

Pair Corralation between Akkhie Prakarn and Yong Concrete

Assuming the 90 days trading horizon Akkhie Prakarn Public is expected to generate 2.31 times more return on investment than Yong Concrete. However, Akkhie Prakarn is 2.31 times more volatile than Yong Concrete PCL. It trades about 0.05 of its potential returns per unit of risk. Yong Concrete PCL is currently generating about -0.06 per unit of risk. If you would invest  64.00  in Akkhie Prakarn Public on December 22, 2024 and sell it today you would earn a total of  4.00  from holding Akkhie Prakarn Public or generate 6.25% return on investment over 90 days.

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

Akkhie Prakarn Public  vs.  Yong Concrete PCL

Akkhie Prakarn Public

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Akkhie Prakarn Public are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Akkhie Prakarn may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Yong Concrete PCL

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Akkhie Prakarn and Yong Concrete

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

The idea behind Akkhie Prakarn Public and Yong Concrete PCL 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.