Correlation Between Somboon Advance and Golden Ventures

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

By analyzing existing cross correlation between Somboon Advance Technology and Golden Ventures Leasehold, you can compare the effects of market volatilities on Somboon Advance and Golden Ventures 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 Somboon Advance with a short position of Golden Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Somboon Advance and Golden Ventures.

Diversification Opportunities for Somboon Advance and Golden Ventures

0.07

Correlation Coefficient

Somboon Advance  Golden Ventures

Significant diversification

The 3 months correlation between Somboon and Golden is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Somboon Advance Technology and Golden Ventures Leasehold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Ventures Leasehold and Somboon Advance 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 Somboon Advance Technology are associated (or correlated) with Golden Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Ventures Leasehold has no effect on the direction of Somboon Advance i.e., Somboon Advance and Golden Ventures go up and down completely randomly.

Pair Corralation between Somboon Advance and Golden Ventures

Assuming the 90 days trading horizon Somboon Advance Technology is expected to under-perform the Golden Ventures. But the stock apears to be less risky and, when comparing its historical volatility, Somboon Advance Technology is 1.42 times less risky than Golden Ventures. The stock trades about -0.19 of its potential returns per unit of risk. The Golden Ventures Leasehold is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  616.00  in Golden Ventures Leasehold on September 13, 2024 and sell it today you would earn a total of  49.00  from holding Golden Ventures Leasehold or generate 7.95% return on investment over 90 days.

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

Somboon Advance Technology  vs.  Golden Ventures Leasehold

Somboon Advance Tech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Somboon Advance Technology 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 basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Golden Ventures Leasehold

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Ventures Leasehold are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Golden Ventures may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Somboon Advance and Golden Ventures

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

The idea behind Somboon Advance Technology and Golden Ventures Leasehold 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.