Correlation Between RPCG Public and S Khonkaen

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

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

Diversification Opportunities for RPCG Public and S Khonkaen

0.73

Correlation Coefficient

RPCG Public  S Khonkaen

Poor diversification

The 3 months correlation between RPCG and SORKON is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding RPCG 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 RPCG Public 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 RPCG 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 RPCG Public i.e., RPCG Public and S Khonkaen go up and down completely randomly.

Pair Corralation between RPCG Public and S Khonkaen

Assuming the 90 days trading horizon RPCG Public is expected to under-perform the S Khonkaen. In addition to that, RPCG Public is 4.13 times more volatile than S Khonkaen Foods. It trades about -0.32 of its total potential returns per unit of risk. S Khonkaen Foods is currently generating about -0.04 per unit of volatility. If you would invest  430.00  in S Khonkaen Foods on October 9, 2024 and sell it today you would lose (2.00) from holding S Khonkaen Foods or give up 0.47% of portfolio value over 90 days.

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

RPCG Public  vs.  S Khonkaen Foods

RPCG Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RPCG Public 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 fundamental indicators remain quite persistent which may send shares a bit higher in February 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

0 of 100

Very Weak

Over the last 90 days S Khonkaen Foods has generated negative risk-adjusted returns adding no value to investors with long positions. 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 RPCG Public and S Khonkaen

The main advantage of trading using opposite RPCG Public and S Khonkaen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RPCG Public 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 RPCG 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.