Correlation Between Sri Trang and Thai Rubber
Can any of the company-specific risk be diversified away by investing in both Sri Trang and Thai Rubber 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 Sri Trang and Thai Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sri Trang Agro Industry and Thai Rubber Latex, you can compare the effects of market volatilities on Sri Trang and Thai Rubber 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 Sri Trang with a short position of Thai Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sri Trang and Thai Rubber.
Diversification Opportunities for Sri Trang and Thai Rubber
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sri and Thai is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Sri Trang Agro Industry and Thai Rubber Latex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Rubber Latex and Sri Trang 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 Sri Trang Agro Industry are associated (or correlated) with Thai Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Rubber Latex has no effect on the direction of Sri Trang i.e., Sri Trang and Thai Rubber go up and down completely randomly.
Pair Corralation between Sri Trang and Thai Rubber
Assuming the 90 days trading horizon Sri Trang Agro Industry is expected to generate 0.93 times more return on investment than Thai Rubber. However, Sri Trang Agro Industry is 1.08 times less risky than Thai Rubber. It trades about 0.0 of its potential returns per unit of risk. Thai Rubber Latex is currently generating about -0.41 per unit of risk. If you would invest 1,540 in Sri Trang Agro Industry on December 4, 2024 and sell it today you would lose (10.00) from holding Sri Trang Agro Industry or give up 0.65% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Sri Trang Agro Industry vs. Thai Rubber Latex
Performance |
Timeline |
Sri Trang Agro |
Thai Rubber Latex |
Sri Trang and Thai Rubber Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sri Trang and Thai Rubber
The main advantage of trading using opposite Sri Trang and Thai Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sri Trang position performs unexpectedly, Thai Rubber 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 Rubber will offset losses from the drop in Thai Rubber's long position.Sri Trang vs. Sri Trang Gloves | Sri Trang vs. Charoen Pokphand Foods | Sri Trang vs. Thai Union Group | Sri Trang vs. The Siam Cement |
Thai Rubber vs. Thoresen Thai Agencies | Thai Rubber vs. Sri Trang Agro Industry | Thai Rubber vs. TPI Polene Public | Thai Rubber vs. Ratchthani Leasing Public |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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