Correlation Between Sermsang Power and Thai Solar
Can any of the company-specific risk be diversified away by investing in both Sermsang Power and Thai Solar 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 Sermsang Power and Thai Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sermsang Power and Thai Solar Energy, you can compare the effects of market volatilities on Sermsang Power and Thai Solar 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 Sermsang Power with a short position of Thai Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sermsang Power and Thai Solar.
Diversification Opportunities for Sermsang Power and Thai Solar
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sermsang and Thai is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Sermsang Power and Thai Solar Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Solar Energy and Sermsang Power 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 Sermsang Power are associated (or correlated) with Thai Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Solar Energy has no effect on the direction of Sermsang Power i.e., Sermsang Power and Thai Solar go up and down completely randomly.
Pair Corralation between Sermsang Power and Thai Solar
Assuming the 90 days trading horizon Sermsang Power is expected to generate 1.0 times more return on investment than Thai Solar. However, Sermsang Power is 1.0 times less risky than Thai Solar. It trades about 0.04 of its potential returns per unit of risk. Thai Solar Energy is currently generating about 0.03 per unit of risk. If you would invest 797.00 in Sermsang Power on December 4, 2024 and sell it today you would lose (247.00) from holding Sermsang Power or give up 30.99% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Sermsang Power vs. Thai Solar Energy
Performance |
Timeline |
Sermsang Power |
Thai Solar Energy |
Sermsang Power and Thai Solar Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sermsang Power and Thai Solar
The main advantage of trading using opposite Sermsang Power and Thai Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sermsang Power position performs unexpectedly, Thai Solar 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 Solar will offset losses from the drop in Thai Solar's long position.Sermsang Power vs. Gunkul Engineering Public | Sermsang Power vs. Energy Absolute Public | Sermsang Power vs. BCPG Public | Sermsang Power vs. Gulf Energy Development |
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Check out your portfolio center.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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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