Correlation Between Peerapat Technology and Simat Technologies

Can any of the company-specific risk be diversified away by investing in both Peerapat Technology and Simat Technologies 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 Peerapat Technology and Simat Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Peerapat Technology and Simat Technologies

-0.04

Correlation Coefficient

Peerapat Technology  Simat Technologies

Good diversification

The 3 months correlation between Peerapat and Simat is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Peerapat Technology Public and Simat Technologies Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simat Technologies Public and Peerapat Technology 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 Peerapat Technology Public are associated (or correlated) with Simat Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simat Technologies Public has no effect on the direction of Peerapat Technology i.e., Peerapat Technology and Simat Technologies go up and down completely randomly.

Pair Corralation between Peerapat Technology and Simat Technologies

Assuming the 90 days trading horizon Peerapat Technology Public is expected to under-perform the Simat Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Peerapat Technology Public is 2.06 times less risky than Simat Technologies. The stock trades about -0.04 of its potential returns per unit of risk. The Simat Technologies Public is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  173.00  in Simat Technologies Public on September 16, 2024 and sell it today you would lose (14.00) from holding Simat Technologies Public or give up 8.09% of portfolio value over 90 days.

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

Peerapat Technology Public  vs.  Simat Technologies Public

Peerapat Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Peerapat Technology Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Peerapat Technology is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Simat Technologies Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Simat Technologies Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Simat Technologies is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Peerapat Technology and Simat Technologies

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

The idea behind Peerapat Technology Public and Simat Technologies 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.

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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.