Correlation Between Srinanaporn Marketing and Thai Ha

Can any of the company-specific risk be diversified away by investing in both Srinanaporn Marketing and Thai Ha 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 Srinanaporn Marketing and Thai Ha into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Srinanaporn Marketing and Thai Ha

0.8

Correlation Coefficient

Srinanaporn Marketing  Thai Ha

Very poor diversification

The 3 months correlation between Srinanaporn and Thai is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Srinanaporn Marketing Public and Thai Ha Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Ha Public and Srinanaporn Marketing 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 Srinanaporn Marketing Public are associated (or correlated) with Thai Ha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Ha Public has no effect on the direction of Srinanaporn Marketing i.e., Srinanaporn Marketing and Thai Ha go up and down completely randomly.

Pair Corralation between Srinanaporn Marketing and Thai Ha

Assuming the 90 days trading horizon Srinanaporn Marketing Public is expected to generate 0.95 times more return on investment than Thai Ha. However, Srinanaporn Marketing Public is 1.06 times less risky than Thai Ha. It trades about -0.06 of its potential returns per unit of risk. Thai Ha Public is currently generating about -0.13 per unit of risk. If you would invest  1,250  in Srinanaporn Marketing Public on September 23, 2024 and sell it today you would lose (70.00) from holding Srinanaporn Marketing Public or give up 5.6% of portfolio value over 90 days.

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

Srinanaporn Marketing Public  vs.  Thai Ha Public

Srinanaporn Marketing

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Srinanaporn Marketing 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 forward-looking signals 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.

Thai Ha Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thai Ha Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Srinanaporn Marketing and Thai Ha

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

The idea behind Srinanaporn Marketing Public and Thai Ha 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.