Correlation Between PINTHONG INDUSTRIAL and Alpha Divisions
Can any of the company-specific risk be diversified away by investing in both PINTHONG INDUSTRIAL and Alpha Divisions 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 PINTHONG INDUSTRIAL and Alpha Divisions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PINTHONG INDUSTRIAL PARK and Alpha Divisions PCL, you can compare the effects of market volatilities on PINTHONG INDUSTRIAL and Alpha Divisions 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 PINTHONG INDUSTRIAL with a short position of Alpha Divisions. Check out your portfolio center. Please also check ongoing floating volatility patterns of PINTHONG INDUSTRIAL and Alpha Divisions.
Diversification Opportunities for PINTHONG INDUSTRIAL and Alpha Divisions
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PINTHONG and Alpha is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding PINTHONG INDUSTRIAL PARK and Alpha Divisions PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Divisions PCL and PINTHONG INDUSTRIAL 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 PINTHONG INDUSTRIAL PARK are associated (or correlated) with Alpha Divisions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Divisions PCL has no effect on the direction of PINTHONG INDUSTRIAL i.e., PINTHONG INDUSTRIAL and Alpha Divisions go up and down completely randomly.
Pair Corralation between PINTHONG INDUSTRIAL and Alpha Divisions
Assuming the 90 days trading horizon PINTHONG INDUSTRIAL is expected to generate 13.43 times less return on investment than Alpha Divisions. But when comparing it to its historical volatility, PINTHONG INDUSTRIAL PARK is 17.11 times less risky than Alpha Divisions. It trades about 0.06 of its potential returns per unit of risk. Alpha Divisions PCL is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 81.00 in Alpha Divisions PCL on September 26, 2024 and sell it today you would lose (22.00) from holding Alpha Divisions PCL or give up 27.16% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 99.67% |
Values | Daily Returns |
PINTHONG INDUSTRIAL PARK vs. Alpha Divisions PCL
Performance |
Timeline |
PINTHONG INDUSTRIAL PARK |
Alpha Divisions PCL |
PINTHONG INDUSTRIAL and Alpha Divisions Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PINTHONG INDUSTRIAL and Alpha Divisions
The main advantage of trading using opposite PINTHONG INDUSTRIAL and Alpha Divisions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PINTHONG INDUSTRIAL position performs unexpectedly, Alpha Divisions 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 Alpha Divisions will offset losses from the drop in Alpha Divisions' long position.PINTHONG INDUSTRIAL vs. Peace Living PCL | PINTHONG INDUSTRIAL vs. The Platinum Group | PINTHONG INDUSTRIAL vs. Property Perfect Public | PINTHONG INDUSTRIAL vs. Siamese Asset Public |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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