Correlation Between Muangthai Capital and North East

Can any of the company-specific risk be diversified away by investing in both Muangthai Capital and North East 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 North East 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 North East Rubbers, you can compare the effects of market volatilities on Muangthai Capital and North East 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 North East. Check out your portfolio center. Please also check ongoing floating volatility patterns of Muangthai Capital and North East.

Diversification Opportunities for Muangthai Capital and North East

0.32

Correlation Coefficient

Muangthai Capital  North East

Weak diversification

The 3 months correlation between Muangthai and North is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Muangthai Capital Public and North East Rubbers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North East Rubbers 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 North East. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North East Rubbers has no effect on the direction of Muangthai Capital i.e., Muangthai Capital and North East go up and down completely randomly.

Pair Corralation between Muangthai Capital and North East

Assuming the 90 days trading horizon Muangthai Capital Public is expected to generate 1.29 times more return on investment than North East. However, Muangthai Capital is 1.29 times more volatile than North East Rubbers. It trades about -0.01 of its potential returns per unit of risk. North East Rubbers is currently generating about -0.13 per unit of risk. If you would invest  4,925  in Muangthai Capital Public on September 27, 2024 and sell it today you would lose (125.00) from holding Muangthai Capital Public or give up 2.54% of portfolio value over 90 days.

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

Muangthai Capital Public  vs.  North East Rubbers

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.

North East Rubbers

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days North East Rubbers has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Muangthai Capital and North East

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

The idea behind Muangthai Capital Public and North East Rubbers 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.