Correlation Between Sun Vending and Muang Thai

Can any of the company-specific risk be diversified away by investing in both Sun Vending and Muang Thai 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 Sun Vending and Muang Thai into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sun Vending Technology and Muang Thai Insurance, you can compare the effects of market volatilities on Sun Vending and Muang Thai 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 Sun Vending with a short position of Muang Thai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Vending and Muang Thai.

Diversification Opportunities for Sun Vending and Muang Thai

-0.35

Correlation Coefficient

Sun Vending  Muang Thai

Very good diversification

The 3 months correlation between Sun and Muang is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Sun Vending Technology and Muang Thai Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Muang Thai Insurance and Sun Vending 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 Sun Vending Technology are associated (or correlated) with Muang Thai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Muang Thai Insurance has no effect on the direction of Sun Vending i.e., Sun Vending and Muang Thai go up and down completely randomly.

Pair Corralation between Sun Vending and Muang Thai

Assuming the 90 days trading horizon Sun Vending is expected to generate 13.36 times less return on investment than Muang Thai. In addition to that, Sun Vending is 1.39 times more volatile than Muang Thai Insurance. It trades about 0.01 of its total potential returns per unit of risk. Muang Thai Insurance is currently generating about 0.15 per unit of volatility. If you would invest  9,863  in Muang Thai Insurance on December 20, 2024 and sell it today you would earn a total of  1,137  from holding Muang Thai Insurance or generate 11.53% return on investment over 90 days.

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

Sun Vending Technology  vs.  Muang Thai Insurance

Sun Vending Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sun Vending Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Sun Vending is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Muang Thai Insurance

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Muang Thai Insurance are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward indicators, Muang Thai may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Sun Vending and Muang Thai

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

The idea behind Sun Vending Technology and Muang Thai Insurance 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 Global Correlations module to find global opportunities by holding instruments from different markets.