Correlation Between Singha Estate and Supalai Public

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

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

Diversification Opportunities for Singha Estate and Supalai Public

0.85

Correlation Coefficient

Singha Estate  Supalai Public

Very poor diversification

The 3 months correlation between Singha and Supalai is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Singha Estate Public and Supalai Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supalai Public and Singha Estate 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 Singha Estate Public are associated (or correlated) with Supalai Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supalai Public has no effect on the direction of Singha Estate i.e., Singha Estate and Supalai Public go up and down completely randomly.

Pair Corralation between Singha Estate and Supalai Public

Assuming the 90 days trading horizon Singha Estate Public is expected to under-perform the Supalai Public. In addition to that, Singha Estate is 1.97 times more volatile than Supalai Public. It trades about -0.22 of its total potential returns per unit of risk. Supalai Public is currently generating about -0.31 per unit of volatility. If you would invest  1,922  in Supalai Public on October 12, 2024 and sell it today you would lose (222.00) from holding Supalai Public or give up 11.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.24%
Values	Daily Returns

Singha Estate Public  vs.  Supalai Public

Singha Estate Public

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Singha Estate Public are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Singha Estate disclosed solid returns over the last few months and may actually be approaching a breakup point.

Supalai Public

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Supalai Public are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting essential indicators, Supalai Public reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Singha Estate and Supalai Public

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

The idea behind Singha Estate Public and Supalai 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.

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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.