Correlation Between Chememan Public and Sri Trang

Can any of the company-specific risk be diversified away by investing in both Chememan Public and Sri Trang 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 Chememan Public and Sri Trang into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chememan Public and Sri Trang Agro Industry, you can compare the effects of market volatilities on Chememan Public and Sri Trang 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 Chememan Public with a short position of Sri Trang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chememan Public and Sri Trang.

Diversification Opportunities for Chememan Public and Sri Trang

0.68

Correlation Coefficient

Chememan Public  Sri Trang

Poor diversification

The 3 months correlation between Chememan and Sri is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Chememan Public and Sri Trang Agro Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sri Trang Agro and Chememan Public 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 Chememan Public are associated (or correlated) with Sri Trang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sri Trang Agro has no effect on the direction of Chememan Public i.e., Chememan Public and Sri Trang go up and down completely randomly.

Pair Corralation between Chememan Public and Sri Trang

Assuming the 90 days trading horizon Chememan Public is expected to generate 0.58 times more return on investment than Sri Trang. However, Chememan Public is 1.73 times less risky than Sri Trang. It trades about -0.13 of its potential returns per unit of risk. Sri Trang Agro Industry is currently generating about -0.11 per unit of risk. If you would invest  252.00  in Chememan Public on September 14, 2024 and sell it today you would lose (30.00) from holding Chememan Public or give up 11.9% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Chememan Public  vs.  Sri Trang Agro Industry

Chememan Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chememan Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Sri Trang Agro

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sri Trang Agro Industry 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 January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Chememan Public and Sri Trang

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

The idea behind Chememan Public and Sri Trang Agro Industry 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.

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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.