Correlation Between Somboon Advance and WICE Logistics
Can any of the company-specific risk be diversified away by investing in both Somboon Advance and WICE Logistics 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 Somboon Advance and WICE Logistics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Somboon Advance Technology and WICE Logistics PCL, you can compare the effects of market volatilities on Somboon Advance and WICE Logistics 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 Somboon Advance with a short position of WICE Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Somboon Advance and WICE Logistics.
Diversification Opportunities for Somboon Advance and WICE Logistics
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Somboon and WICE is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Somboon Advance Technology and WICE Logistics PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WICE Logistics PCL and Somboon Advance 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 Somboon Advance Technology are associated (or correlated) with WICE Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WICE Logistics PCL has no effect on the direction of Somboon Advance i.e., Somboon Advance and WICE Logistics go up and down completely randomly.
Pair Corralation between Somboon Advance and WICE Logistics
Assuming the 90 days trading horizon Somboon Advance Technology is expected to generate 0.4 times more return on investment than WICE Logistics. However, Somboon Advance Technology is 2.53 times less risky than WICE Logistics. It trades about -0.21 of its potential returns per unit of risk. WICE Logistics PCL is currently generating about -0.19 per unit of risk. If you would invest 1,660 in Somboon Advance Technology on February 6, 2024 and sell it today you would lose (40.00) from holding Somboon Advance Technology or give up 2.41% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Somboon Advance Technology vs. WICE Logistics PCL
Performance |
Timeline |
Somboon Advance Tech |
WICE Logistics PCL |
Somboon Advance and WICE Logistics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Somboon Advance and WICE Logistics
The main advantage of trading using opposite Somboon Advance and WICE Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Somboon Advance position performs unexpectedly, WICE Logistics 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 WICE Logistics will offset losses from the drop in WICE Logistics' long position.Somboon Advance vs. Sri Trang Gloves | Somboon Advance vs. Charoen Pokphand Foods | Somboon Advance vs. Thai Union Group | Somboon Advance vs. The Siam Cement |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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