Correlation Between Ngern Tid and Praram 9

Can any of the company-specific risk be diversified away by investing in both Ngern Tid and Praram 9 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 Ngern Tid and Praram 9 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ngern Tid Lor and Praram 9 Hospital, you can compare the effects of market volatilities on Ngern Tid and Praram 9 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 Ngern Tid with a short position of Praram 9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ngern Tid and Praram 9.

Diversification Opportunities for Ngern Tid and Praram 9

-0.11

Correlation Coefficient

Ngern Tid  Praram 9

Good diversification

The 3 months correlation between Ngern and Praram is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Ngern Tid Lor and Praram 9 Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Praram 9 Hospital and Ngern Tid 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 Ngern Tid Lor are associated (or correlated) with Praram 9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Praram 9 Hospital has no effect on the direction of Ngern Tid i.e., Ngern Tid and Praram 9 go up and down completely randomly.

Pair Corralation between Ngern Tid and Praram 9

Assuming the 90 days trading horizon Ngern Tid Lor is expected to under-perform the Praram 9. In addition to that, Ngern Tid is 2.11 times more volatile than Praram 9 Hospital. It trades about -0.05 of its total potential returns per unit of risk. Praram 9 Hospital is currently generating about 0.04 per unit of volatility. If you would invest  1,910  in Praram 9 Hospital on January 29, 2024 and sell it today you would earn a total of  10.00  from holding Praram 9 Hospital or generate 0.52% return on investment over 90 days.

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

Ngern Tid Lor  vs.  Praram 9 Hospital

Ngern Tid Lor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ngern Tid Lor has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Ngern Tid is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Praram 9 Hospital

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Praram 9 Hospital are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Praram 9 may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Ngern Tid and Praram 9

The main advantage of trading using opposite Ngern Tid and Praram 9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ngern Tid position performs unexpectedly, Praram 9 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 Praram 9 will offset losses from the drop in Praram 9's long position.

The idea behind Ngern Tid Lor and Praram 9 Hospital 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.