Correlation Between HEMARAJ INDUSTRIAL and MFC Nichada

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

By analyzing existing cross correlation between HEMARAJ INDUSTRIAL PROPERTY and MFC Nichada Thani Property, you can compare the effects of market volatilities on HEMARAJ INDUSTRIAL and MFC Nichada 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 HEMARAJ INDUSTRIAL with a short position of MFC Nichada. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEMARAJ INDUSTRIAL and MFC Nichada.

Diversification Opportunities for HEMARAJ INDUSTRIAL and MFC Nichada

0.23

Correlation Coefficient

HEMARAJ INDUSTRIAL  MFC Nichada

Modest diversification

The 3 months correlation between HEMARAJ and MFC is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding HEMARAJ INDUSTRIAL PROPERTY and MFC Nichada Thani Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFC Nichada Thani and HEMARAJ INDUSTRIAL 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 HEMARAJ INDUSTRIAL PROPERTY are associated (or correlated) with MFC Nichada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFC Nichada Thani has no effect on the direction of HEMARAJ INDUSTRIAL i.e., HEMARAJ INDUSTRIAL and MFC Nichada go up and down completely randomly.

Pair Corralation between HEMARAJ INDUSTRIAL and MFC Nichada

Assuming the 90 days trading horizon HEMARAJ INDUSTRIAL PROPERTY is expected to under-perform the MFC Nichada. But the stock apears to be less risky and, when comparing its historical volatility, HEMARAJ INDUSTRIAL PROPERTY is 497.22 times less risky than MFC Nichada. The stock trades about -0.14 of its potential returns per unit of risk. The MFC Nichada Thani Property is currently generating about 0.45 of returns per unit of risk over similar time horizon. If you would invest  474.00  in MFC Nichada Thani Property on December 2, 2024 and sell it today you would earn a total of  26.00  from holding MFC Nichada Thani Property or generate 5.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	68.85%
Values	Daily Returns

HEMARAJ INDUSTRIAL PROPERTY  vs.  MFC Nichada Thani Property

HEMARAJ INDUSTRIAL

Risk-Adjusted Performance

Very Weak

Over the last 90 days HEMARAJ INDUSTRIAL PROPERTY has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

MFC Nichada Thani

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in MFC Nichada Thani Property are ranked lower than 35 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, MFC Nichada sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HEMARAJ INDUSTRIAL and MFC Nichada

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

The idea behind HEMARAJ INDUSTRIAL PROPERTY and MFC Nichada Thani Property 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.