Correlation Between Sherwood Public and Thai Mitsuwa

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

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

Diversification Opportunities for Sherwood Public and Thai Mitsuwa

-0.08

Correlation Coefficient

Sherwood Public  Thai Mitsuwa

Good diversification

The 3 months correlation between Sherwood and Thai is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Sherwood Public and Thai Mitsuwa Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Mitsuwa Public and Sherwood Public 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 Sherwood Public are associated (or correlated) with Thai Mitsuwa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Mitsuwa Public has no effect on the direction of Sherwood Public i.e., Sherwood Public and Thai Mitsuwa go up and down completely randomly.

Pair Corralation between Sherwood Public and Thai Mitsuwa

Assuming the 90 days trading horizon Sherwood Public is expected to under-perform the Thai Mitsuwa. In addition to that, Sherwood Public is 1.3 times more volatile than Thai Mitsuwa Public. It trades about -0.16 of its total potential returns per unit of risk. Thai Mitsuwa Public is currently generating about 0.0 per unit of volatility. If you would invest  6,225  in Thai Mitsuwa Public on September 14, 2024 and sell it today you would lose (25.00) from holding Thai Mitsuwa Public or give up 0.4% of portfolio value over 90 days.

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

Sherwood Public  vs.  Thai Mitsuwa Public

Sherwood Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sherwood 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 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.

Thai Mitsuwa Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thai Mitsuwa Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Thai Mitsuwa is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Sherwood Public and Thai Mitsuwa

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

The idea behind Sherwood Public and Thai Mitsuwa 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..