Correlation Between Precious Shipping and Vanachai Group

Can any of the company-specific risk be diversified away by investing in both Precious Shipping and Vanachai Group 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 Precious Shipping and Vanachai Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Precious Shipping and Vanachai Group

0.88

Correlation Coefficient

Precious Shipping  Vanachai Group

Very poor diversification

The 3 months correlation between Precious and Vanachai is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Precious Shipping Public and Vanachai Group Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanachai Group Public and Precious Shipping 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 Precious Shipping Public are associated (or correlated) with Vanachai Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanachai Group Public has no effect on the direction of Precious Shipping i.e., Precious Shipping and Vanachai Group go up and down completely randomly.

Pair Corralation between Precious Shipping and Vanachai Group

Assuming the 90 days trading horizon Precious Shipping Public is expected to generate 1.81 times more return on investment than Vanachai Group. However, Precious Shipping is 1.81 times more volatile than Vanachai Group Public. It trades about -0.1 of its potential returns per unit of risk. Vanachai Group Public is currently generating about -0.19 per unit of risk. If you would invest  824.00  in Precious Shipping Public on September 17, 2024 and sell it today you would lose (104.00) from holding Precious Shipping Public or give up 12.62% of portfolio value over 90 days.

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

Precious Shipping Public  vs.  Vanachai Group Public

Precious Shipping Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Precious Shipping Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's essential 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.

Vanachai Group Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vanachai Group Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's technical and fundamental 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 Precious Shipping and Vanachai Group

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

The idea behind Precious Shipping Public and Vanachai Group 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.