Correlation Between Thai Energy and Asia Plus
Can any of the company-specific risk be diversified away by investing in both Thai Energy and Asia Plus 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 Thai Energy and Asia Plus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thai Energy Storage and Asia Plus Group, you can compare the effects of market volatilities on Thai Energy and Asia Plus 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 Thai Energy with a short position of Asia Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Energy and Asia Plus.
Diversification Opportunities for Thai Energy and Asia Plus
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Thai and Asia is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Thai Energy Storage and Asia Plus Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Plus Group and Thai Energy 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 Thai Energy Storage are associated (or correlated) with Asia Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Plus Group has no effect on the direction of Thai Energy i.e., Thai Energy and Asia Plus go up and down completely randomly.
Pair Corralation between Thai Energy and Asia Plus
Assuming the 90 days trading horizon Thai Energy Storage is expected to generate 0.34 times more return on investment than Asia Plus. However, Thai Energy Storage is 2.94 times less risky than Asia Plus. It trades about 0.07 of its potential returns per unit of risk. Asia Plus Group is currently generating about -0.08 per unit of risk. If you would invest 5,350 in Thai Energy Storage on August 29, 2024 and sell it today you would earn a total of 25.00 from holding Thai Energy Storage or generate 0.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Energy Storage vs. Asia Plus Group
Performance |
| Timeline |
| Thai Energy Storage |
| Asia Plus Group |
Thai Energy and Asia Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Energy and Asia Plus
The main advantage of trading using opposite Thai Energy and Asia Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Energy position performs unexpectedly, Asia Plus 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 Plus will offset losses from the drop in Asia Plus' long position.| Thai Energy vs. AJ Advance Technology | Thai Energy vs. Asia Precision Public | Thai Energy vs. Asia Metal Public | Thai Energy vs. The Erawan Group |
| Asia Plus vs. KGI Securities Public | Asia Plus vs. Bangkok Bank Public | Asia Plus vs. Land and Houses | Asia Plus vs. Italian Thai Development Public |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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