Correlation Between SGF Capital and Thai Mui

Can any of the company-specific risk be diversified away by investing in both SGF Capital and Thai Mui 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 SGF Capital and Thai Mui into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for SGF Capital and Thai Mui

0.85

Correlation Coefficient

SGF Capital  Thai Mui

Very poor diversification

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

Pair Corralation between SGF Capital and Thai Mui

Assuming the 90 days trading horizon SGF Capital Public is expected to under-perform the Thai Mui. In addition to that, SGF Capital is 1.24 times more volatile than Thai Mui. It trades about -0.13 of its total potential returns per unit of risk. Thai Mui is currently generating about -0.09 per unit of volatility. If you would invest  60.00  in Thai Mui on October 10, 2024 and sell it today you would lose (10.00) from holding Thai Mui or give up 16.67% of portfolio value over 90 days.

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

SGF Capital Public  vs.  Thai Mui

SGF Capital Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SGF Capital 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 technical and 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.

Thai Mui

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thai Mui 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 fundamental drivers remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with SGF Capital and Thai Mui

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

The idea behind SGF Capital Public and Thai Mui 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.