Correlation Between Sao Ta and Post

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

By analyzing existing cross correlation between Sao Ta Foods and Post and Telecommunications, you can compare the effects of market volatilities on Sao Ta and Post 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 Sao Ta with a short position of Post. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sao Ta and Post.

Diversification Opportunities for Sao Ta and Post

0.08

Correlation Coefficient

Sao Ta  Post

Significant diversification

The 3 months correlation between Sao and Post is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Sao Ta Foods and Post and Telecommunications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Post and Telecommuni and Sao Ta 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 Sao Ta Foods are associated (or correlated) with Post. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Post and Telecommuni has no effect on the direction of Sao Ta i.e., Sao Ta and Post go up and down completely randomly.

Pair Corralation between Sao Ta and Post

Assuming the 90 days trading horizon Sao Ta Foods is expected to generate 0.34 times more return on investment than Post. However, Sao Ta Foods is 2.96 times less risky than Post. It trades about 0.07 of its potential returns per unit of risk. Post and Telecommunications is currently generating about -0.03 per unit of risk. If you would invest  4,650,000  in Sao Ta Foods on September 12, 2024 and sell it today you would earn a total of  160,000  from holding Sao Ta Foods or generate 3.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Sao Ta Foods  vs.  Post and Telecommunications

Sao Ta Foods

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sao Ta Foods are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Sao Ta is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Post and Telecommuni

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Post and Telecommunications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Post is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Sao Ta and Post

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

The idea behind Sao Ta Foods and Post and Telecommunications 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.