Correlation Between Lease IT and Supalai Public

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

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

Diversification Opportunities for Lease IT and Supalai Public

0.24

Correlation Coefficient

Lease IT  Supalai Public

Modest diversification

The 3 months correlation between Lease and Supalai is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Lease IT Public and Supalai Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supalai Public and Lease IT 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 Lease IT Public are associated (or correlated) with Supalai Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supalai Public has no effect on the direction of Lease IT i.e., Lease IT and Supalai Public go up and down completely randomly.

Pair Corralation between Lease IT and Supalai Public

Assuming the 90 days trading horizon Lease IT Public is expected to under-perform the Supalai Public. But the stock apears to be less risky and, when comparing its historical volatility, Lease IT Public is 35.91 times less risky than Supalai Public. The stock trades about -0.18 of its potential returns per unit of risk. The Supalai Public is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  2,119  in Supalai Public on September 29, 2024 and sell it today you would lose (289.00) from holding Supalai Public or give up 13.64% of portfolio value over 90 days.

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

Lease IT Public  vs.  Supalai Public

Lease IT Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lease IT Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak 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.

Supalai Public

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Supalai Public are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting essential indicators, Supalai Public reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lease IT and Supalai Public

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

The idea behind Lease IT Public and Supalai Public 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.