Correlation Between Supalai Public and Phatra Leasing

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

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

Diversification Opportunities for Supalai Public and Phatra Leasing

0.22

Correlation Coefficient

Supalai Public  Phatra Leasing

Modest diversification

The 3 months correlation between Supalai and Phatra is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Supalai Public and Phatra Leasing Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phatra Leasing Public and Supalai 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 Supalai Public are associated (or correlated) with Phatra Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phatra Leasing Public has no effect on the direction of Supalai Public i.e., Supalai Public and Phatra Leasing go up and down completely randomly.

Pair Corralation between Supalai Public and Phatra Leasing

Assuming the 90 days trading horizon Supalai Public is expected to generate 122.38 times more return on investment than Phatra Leasing. However, Supalai Public is 122.38 times more volatile than Phatra Leasing Public. It trades about 0.11 of its potential returns per unit of risk. Phatra Leasing Public is currently generating about -0.18 per unit of risk. If you would invest  2,119  in Supalai Public on September 14, 2024 and sell it today you would lose (219.00) from holding Supalai Public or give up 10.34% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Supalai Public  vs.  Phatra Leasing Public

Supalai Public

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Supalai Public are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting essential indicators, Supalai Public reported solid returns over the last few months and may actually be approaching a breakup point.

Phatra Leasing Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Phatra Leasing Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental drivers 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 Supalai Public and Phatra Leasing

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

The idea behind Supalai Public and Phatra Leasing 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.