Correlation Between Asia Medical and S Khonkaen

Can any of the company-specific risk be diversified away by investing in both Asia Medical and S Khonkaen 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 Asia Medical and S Khonkaen into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Asia Medical Agricultural and S Khonkaen Foods, you can compare the effects of market volatilities on Asia Medical and S Khonkaen 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 Asia Medical with a short position of S Khonkaen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Medical and S Khonkaen.

Diversification Opportunities for Asia Medical and S Khonkaen

-0.01

Correlation Coefficient

Asia Medical  S Khonkaen

Good diversification

The 3 months correlation between Asia and SORKON is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Asia Medical Agricultural and S Khonkaen Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on S Khonkaen Foods and Asia Medical 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 Asia Medical Agricultural are associated (or correlated) with S Khonkaen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of S Khonkaen Foods has no effect on the direction of Asia Medical i.e., Asia Medical and S Khonkaen go up and down completely randomly.

Pair Corralation between Asia Medical and S Khonkaen

Assuming the 90 days trading horizon Asia Medical Agricultural is expected to under-perform the S Khonkaen. But the stock apears to be less risky and, when comparing its historical volatility, Asia Medical Agricultural is 19.06 times less risky than S Khonkaen. The stock trades about -0.04 of its potential returns per unit of risk. The S Khonkaen Foods is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  516.00  in S Khonkaen Foods on September 14, 2024 and sell it today you would lose (88.00) from holding S Khonkaen Foods or give up 17.05% of portfolio value over 90 days.

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

Asia Medical Agricultural  vs.  S Khonkaen Foods

Asia Medical Agricultural

Risk-Adjusted Performance

0 of 100

Very Weak

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

S Khonkaen Foods

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Asia Medical and S Khonkaen

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

The idea behind Asia Medical Agricultural and S Khonkaen Foods 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.