Correlation Between Muangthai Capital and Lease IT

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

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

Diversification Opportunities for Muangthai Capital and Lease IT

0.4

Correlation Coefficient

Muangthai Capital  Lease IT

Very weak diversification

The 3 months correlation between Muangthai and Lease is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Muangthai Capital Public and Lease IT Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lease IT Public and Muangthai Capital 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 Muangthai Capital Public are associated (or correlated) with Lease IT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lease IT Public has no effect on the direction of Muangthai Capital i.e., Muangthai Capital and Lease IT go up and down completely randomly.

Pair Corralation between Muangthai Capital and Lease IT

Assuming the 90 days trading horizon Muangthai Capital Public is expected to generate 0.63 times more return on investment than Lease IT. However, Muangthai Capital Public is 1.58 times less risky than Lease IT. It trades about 0.0 of its potential returns per unit of risk. Lease IT Public is currently generating about -0.17 per unit of risk. If you would invest  5,025  in Muangthai Capital Public on September 13, 2024 and sell it today you would lose (75.00) from holding Muangthai Capital Public or give up 1.49% of portfolio value over 90 days.

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

Muangthai Capital Public  vs.  Lease IT Public

Muangthai Capital Public

Risk-Adjusted Performance

0 of 100

Very Weak

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

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.

Pair Trading with Muangthai Capital and Lease IT

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

The idea behind Muangthai Capital Public and Lease IT 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.