Correlation Between Home Product and Ratchthani Leasing

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

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

Diversification Opportunities for Home Product and Ratchthani Leasing

0.52

Correlation Coefficient

Home Product  Ratchthani Leasing

Very weak diversification

The 3 months correlation between Home and Ratchthani is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Home Product Center and Ratchthani Leasing Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ratchthani Leasing Public and Home Product 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 Home Product Center are associated (or correlated) with Ratchthani Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ratchthani Leasing Public has no effect on the direction of Home Product i.e., Home Product and Ratchthani Leasing go up and down completely randomly.

Pair Corralation between Home Product and Ratchthani Leasing

Assuming the 90 days trading horizon Home Product Center is expected to generate 0.95 times more return on investment than Ratchthani Leasing. However, Home Product Center is 1.05 times less risky than Ratchthani Leasing. It trades about 0.04 of its potential returns per unit of risk. Ratchthani Leasing Public is currently generating about -0.12 per unit of risk. If you would invest  924.00  in Home Product Center on September 4, 2024 and sell it today you would earn a total of  41.00  from holding Home Product Center or generate 4.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Home Product Center  vs.  Ratchthani Leasing Public

Home Product Center

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Home Product Center are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, Home Product is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ratchthani Leasing Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ratchthani Leasing 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 drivers remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Home Product and Ratchthani Leasing

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

The idea behind Home Product Center and Ratchthani Leasing 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.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.