Correlation Between Somboon Advance and Namyong Terminal

Can any of the company-specific risk be diversified away by investing in both Somboon Advance and Namyong Terminal 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 Namyong Terminal 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 Namyong Terminal PCL, you can compare the effects of market volatilities on Somboon Advance and Namyong Terminal 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 Namyong Terminal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Somboon Advance and Namyong Terminal.

Diversification Opportunities for Somboon Advance and Namyong Terminal

0.91

Correlation Coefficient

Somboon Advance  Namyong Terminal

Almost no diversification

The 3 months correlation between Somboon and Namyong is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Somboon Advance Technology and Namyong Terminal PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Namyong Terminal PCL 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 Namyong Terminal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Namyong Terminal PCL has no effect on the direction of Somboon Advance i.e., Somboon Advance and Namyong Terminal go up and down completely randomly.

Pair Corralation between Somboon Advance and Namyong Terminal

Assuming the 90 days trading horizon Somboon Advance Technology is expected to under-perform the Namyong Terminal. But the stock apears to be less risky and, when comparing its historical volatility, Somboon Advance Technology is 1.75 times less risky than Namyong Terminal. The stock trades about -0.11 of its potential returns per unit of risk. The Namyong Terminal PCL is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  298.00  in Namyong Terminal PCL on September 17, 2024 and sell it today you would earn a total of  0.00  from holding Namyong Terminal PCL or generate 0.0% return on investment over 90 days.

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

Somboon Advance Technology  vs.  Namyong Terminal PCL

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.

Namyong Terminal PCL

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Somboon Advance and Namyong Terminal

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

The idea behind Somboon Advance Technology and Namyong Terminal PCL 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.