Correlation Between Tropical Canning and Asia Sermkij

Can any of the company-specific risk be diversified away by investing in both Tropical Canning and Asia Sermkij 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 Tropical Canning and Asia Sermkij into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Tropical Canning and Asia Sermkij

0.44

Correlation Coefficient

Tropical Canning  Asia Sermkij

Very weak diversification

The 3 months correlation between Tropical and Asia is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Tropical Canning Public and Asia Sermkij Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Sermkij Leasing and Tropical Canning 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 Tropical Canning Public are associated (or correlated) with Asia Sermkij. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Sermkij Leasing has no effect on the direction of Tropical Canning i.e., Tropical Canning and Asia Sermkij go up and down completely randomly.

Pair Corralation between Tropical Canning and Asia Sermkij

Assuming the 90 days horizon Tropical Canning Public is expected to generate 0.78 times more return on investment than Asia Sermkij. However, Tropical Canning Public is 1.28 times less risky than Asia Sermkij. It trades about -0.06 of its potential returns per unit of risk. Asia Sermkij Leasing is currently generating about -0.21 per unit of risk. If you would invest  765.00  in Tropical Canning Public on September 13, 2024 and sell it today you would lose (55.00) from holding Tropical Canning Public or give up 7.19% of portfolio value over 90 days.

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

Tropical Canning Public  vs.  Asia Sermkij Leasing

Tropical Canning Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tropical Canning Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental drivers remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Asia Sermkij Leasing

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asia Sermkij Leasing 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 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.

Pair Trading with Tropical Canning and Asia Sermkij

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

The idea behind Tropical Canning Public and Asia Sermkij Leasing 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.

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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.