Correlation Between S Khonkaen and Surapon Foods

Can any of the company-specific risk be diversified away by investing in both S Khonkaen and Surapon Foods 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 Surapon Foods 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 Surapon Foods Public, you can compare the effects of market volatilities on S Khonkaen and Surapon Foods 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 Surapon Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of S Khonkaen and Surapon Foods.

Diversification Opportunities for S Khonkaen and Surapon Foods

0.69

Correlation Coefficient

S Khonkaen  Surapon Foods

Poor diversification

The 3 months correlation between SORKON and Surapon is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding S Khonkaen Foods and Surapon Foods Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surapon Foods 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 Surapon Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surapon Foods Public has no effect on the direction of S Khonkaen i.e., S Khonkaen and Surapon Foods go up and down completely randomly.

Pair Corralation between S Khonkaen and Surapon Foods

Assuming the 90 days trading horizon S Khonkaen is expected to generate 1.01 times less return on investment than Surapon Foods. In addition to that, S Khonkaen is 1.0 times more volatile than Surapon Foods Public. It trades about 0.04 of its total potential returns per unit of risk. Surapon Foods Public is currently generating about 0.04 per unit of volatility. If you would invest  750.00  in Surapon Foods Public on October 7, 2024 and sell it today you would lose (105.00) from holding Surapon Foods Public or give up 14.0% of portfolio value over 90 days.

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

S Khonkaen Foods  vs.  Surapon Foods 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.

Surapon Foods Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Surapon Foods Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's technical and fundamental 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 S Khonkaen and Surapon Foods

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

The idea behind S Khonkaen Foods and Surapon Foods 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.