Correlation Between Dexon Technology and Asia Sermkij

Can any of the company-specific risk be diversified away by investing in both Dexon Technology and Asia Sermkij 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 Dexon Technology and Asia Sermkij into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dexon Technology PCL and Asia Sermkij Leasing, you can compare the effects of market volatilities on Dexon Technology and Asia Sermkij 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 Dexon Technology with a short position of Asia Sermkij. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dexon Technology and Asia Sermkij.

Diversification Opportunities for Dexon Technology and Asia Sermkij

0.37

Correlation Coefficient

Dexon Technology  Asia Sermkij

Weak diversification

The 3 months correlation between Dexon and Asia is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Dexon Technology PCL and Asia Sermkij Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Sermkij Leasing and Dexon Technology 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 Dexon Technology PCL are associated (or correlated) with Asia Sermkij. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Sermkij Leasing has no effect on the direction of Dexon Technology i.e., Dexon Technology and Asia Sermkij go up and down completely randomly.

Pair Corralation between Dexon Technology and Asia Sermkij

Assuming the 90 days trading horizon Dexon Technology PCL is expected to generate 1.17 times more return on investment than Asia Sermkij. However, Dexon Technology is 1.17 times more volatile than Asia Sermkij Leasing. It trades about 0.01 of its potential returns per unit of risk. Asia Sermkij Leasing is currently generating about -0.15 per unit of risk. If you would invest  140.00  in Dexon Technology PCL on December 21, 2024 and sell it today you would lose (1.00) from holding Dexon Technology PCL or give up 0.71% of portfolio value over 90 days.

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

Dexon Technology PCL  vs.  Asia Sermkij Leasing

Dexon Technology PCL

Risk-Adjusted Performance

Weak

Over the last 90 days Dexon Technology PCL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Dexon Technology is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Asia Sermkij Leasing

Risk-Adjusted Performance

Very Weak

Over the last 90 days Asia Sermkij Leasing has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward-looking signals 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.

Pair Trading with Dexon Technology and Asia Sermkij

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

The idea behind Dexon Technology PCL and Asia Sermkij Leasing 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.