Correlation Between Tanachira Retail and Rojana Industrial

Can any of the company-specific risk be diversified away by investing in both Tanachira Retail and Rojana Industrial 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 Tanachira Retail and Rojana Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tanachira Retail and Rojana Industrial Park, you can compare the effects of market volatilities on Tanachira Retail and Rojana Industrial 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 Tanachira Retail with a short position of Rojana Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tanachira Retail and Rojana Industrial.

Diversification Opportunities for Tanachira Retail and Rojana Industrial

0.88

Correlation Coefficient

Tanachira Retail  Rojana Industrial

Very poor diversification

The 3 months correlation between Tanachira and Rojana is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Tanachira Retail and Rojana Industrial Park in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rojana Industrial Park and Tanachira Retail 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 Tanachira Retail are associated (or correlated) with Rojana Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rojana Industrial Park has no effect on the direction of Tanachira Retail i.e., Tanachira Retail and Rojana Industrial go up and down completely randomly.

Pair Corralation between Tanachira Retail and Rojana Industrial

Assuming the 90 days trading horizon Tanachira Retail is expected to under-perform the Rojana Industrial. In addition to that, Tanachira Retail is 2.2 times more volatile than Rojana Industrial Park. It trades about -0.12 of its total potential returns per unit of risk. Rojana Industrial Park is currently generating about -0.05 per unit of volatility. If you would invest  625.00  in Rojana Industrial Park on December 23, 2024 and sell it today you would lose (35.00) from holding Rojana Industrial Park or give up 5.6% of portfolio value over 90 days.

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

Tanachira Retail  vs.  Rojana Industrial Park

Tanachira Retail

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tanachira Retail 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 basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Rojana Industrial Park

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rojana Industrial Park has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Rojana Industrial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Tanachira Retail and Rojana Industrial

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

The idea behind Tanachira Retail and Rojana Industrial Park 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.