Correlation Between Dynasty Ceramic and S Khonkaen

Can any of the company-specific risk be diversified away by investing in both Dynasty Ceramic and S Khonkaen 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 Dynasty Ceramic and S Khonkaen into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Dynasty Ceramic and S Khonkaen

-0.46

Correlation Coefficient

Dynasty Ceramic  S Khonkaen

Very good diversification

The 3 months correlation between Dynasty and SORKON is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Dynasty Ceramic Public and S Khonkaen Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on S Khonkaen Foods and Dynasty Ceramic 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 Dynasty Ceramic Public are associated (or correlated) with S Khonkaen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of S Khonkaen Foods has no effect on the direction of Dynasty Ceramic i.e., Dynasty Ceramic and S Khonkaen go up and down completely randomly.

Pair Corralation between Dynasty Ceramic and S Khonkaen

Assuming the 90 days trading horizon Dynasty Ceramic Public is expected to under-perform the S Khonkaen. In addition to that, Dynasty Ceramic is 3.04 times more volatile than S Khonkaen Foods. It trades about -0.1 of its total potential returns per unit of risk. S Khonkaen Foods is currently generating about 0.07 per unit of volatility. If you would invest  428.00  in S Khonkaen Foods on December 30, 2024 and sell it today you would earn a total of  16.00  from holding S Khonkaen Foods or generate 3.74% return on investment over 90 days.

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

Dynasty Ceramic Public  vs.  S Khonkaen Foods

Dynasty Ceramic Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dynasty Ceramic Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

S Khonkaen Foods

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in S Khonkaen Foods are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, S Khonkaen is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Dynasty Ceramic and S Khonkaen

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

The idea behind Dynasty Ceramic Public and S Khonkaen Foods 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.