Correlation Between Surapon Foods and CK Power

Can any of the company-specific risk be diversified away by investing in both Surapon Foods and CK Power 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 Surapon Foods and CK Power into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Surapon Foods and CK Power

0.73

Correlation Coefficient

Surapon Foods  CK Power

Poor diversification

The 3 months correlation between Surapon and CKP-R is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Surapon Foods Public and CK Power Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CK Power Public and Surapon Foods 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 Surapon Foods Public are associated (or correlated) with CK Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CK Power Public has no effect on the direction of Surapon Foods i.e., Surapon Foods and CK Power go up and down completely randomly.

Pair Corralation between Surapon Foods and CK Power

Assuming the 90 days trading horizon Surapon Foods Public is expected to generate 0.93 times more return on investment than CK Power. However, Surapon Foods Public is 1.07 times less risky than CK Power. It trades about -0.09 of its potential returns per unit of risk. CK Power Public is currently generating about -0.15 per unit of risk. If you would invest  680.00  in Surapon Foods Public on December 3, 2024 and sell it today you would lose (85.00) from holding Surapon Foods Public or give up 12.5% of portfolio value over 90 days.

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

Surapon Foods Public  vs.  CK Power Public

Surapon Foods Public

Risk-Adjusted Performance

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.

CK Power Public

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Surapon Foods and CK Power

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

The idea behind Surapon Foods Public and CK Power 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.