Correlation Between S Khonkaen and Haad Thip

Can any of the company-specific risk be diversified away by investing in both S Khonkaen and Haad Thip 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 S Khonkaen and Haad Thip into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for S Khonkaen and Haad Thip

0.35

Correlation Coefficient

S Khonkaen  Haad Thip

Weak diversification

The 3 months correlation between SORKON and Haad is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding S Khonkaen Foods and Haad Thip Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haad Thip Public and S Khonkaen 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 S Khonkaen Foods are associated (or correlated) with Haad Thip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haad Thip Public has no effect on the direction of S Khonkaen i.e., S Khonkaen and Haad Thip go up and down completely randomly.

Pair Corralation between S Khonkaen and Haad Thip

Assuming the 90 days trading horizon S Khonkaen Foods is expected to generate 26.62 times more return on investment than Haad Thip. However, S Khonkaen is 26.62 times more volatile than Haad Thip Public. It trades about 0.04 of its potential returns per unit of risk. Haad Thip Public is currently generating about 0.03 per unit of risk. If you would invest  539.00  in S Khonkaen Foods on October 7, 2024 and sell it today you would lose (111.00) from holding S Khonkaen Foods or give up 20.59% of portfolio value over 90 days.

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

S Khonkaen Foods  vs.  Haad Thip Public

S Khonkaen Foods

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days S Khonkaen Foods has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, S Khonkaen is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Haad Thip Public

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Haad Thip Public are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental indicators, Haad Thip is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with S Khonkaen and Haad Thip

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

The idea behind S Khonkaen Foods and Haad Thip 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..