Correlation Between Seafco Public and Nawarat Patanakarn

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

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

Diversification Opportunities for Seafco Public and Nawarat Patanakarn

-0.3

Correlation Coefficient

Seafco Public  Nawarat Patanakarn

Very good diversification

The 3 months correlation between Seafco and Nawarat is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Seafco Public and Nawarat Patanakarn Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nawarat Patanakarn Public and Seafco 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 Seafco Public are associated (or correlated) with Nawarat Patanakarn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nawarat Patanakarn Public has no effect on the direction of Seafco Public i.e., Seafco Public and Nawarat Patanakarn go up and down completely randomly.

Pair Corralation between Seafco Public and Nawarat Patanakarn

Assuming the 90 days trading horizon Seafco Public is expected to generate 0.29 times more return on investment than Nawarat Patanakarn. However, Seafco Public is 3.44 times less risky than Nawarat Patanakarn. It trades about -0.07 of its potential returns per unit of risk. Nawarat Patanakarn Public is currently generating about -0.09 per unit of risk. If you would invest  199.00  in Seafco Public on December 2, 2024 and sell it today you would lose (19.00) from holding Seafco Public or give up 9.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Seafco Public  vs.  Nawarat Patanakarn Public

Seafco Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Seafco Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Nawarat Patanakarn Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nawarat Patanakarn Public 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 April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Seafco Public and Nawarat Patanakarn

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

The idea behind Seafco Public and Nawarat Patanakarn 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.

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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.