Correlation Between Thai Energy and Nfc PLC
Can any of the company-specific risk be diversified away by investing in both Thai Energy and Nfc PLC 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 Nfc PLC 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 Nfc PLC, you can compare the effects of market volatilities on Thai Energy and Nfc PLC 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 Nfc PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Energy and Nfc PLC.
Diversification Opportunities for Thai Energy and Nfc PLC
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Thai and Nfc is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Thai Energy Storage and Nfc PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nfc PLC 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 Nfc PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nfc PLC has no effect on the direction of Thai Energy i.e., Thai Energy and Nfc PLC go up and down completely randomly.
Pair Corralation between Thai Energy and Nfc PLC
Assuming the 90 days trading horizon Thai Energy Storage is expected to generate 1.0 times more return on investment than Nfc PLC. However, Thai Energy is 1.0 times more volatile than Nfc PLC. It trades about 0.05 of its potential returns per unit of risk. Nfc PLC is currently generating about 0.04 per unit of risk. If you would invest 4,850 in Thai Energy Storage on August 28, 2024 and sell it today you would earn a total of 525.00 from holding Thai Energy Storage or generate 10.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Energy Storage vs. Nfc PLC
Performance |
| Timeline |
| Thai Energy Storage |
| Nfc PLC |
Thai Energy and Nfc PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Energy and Nfc PLC
The main advantage of trading using opposite Thai Energy and Nfc PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Energy position performs unexpectedly, Nfc PLC 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 Nfc PLC will offset losses from the drop in Nfc PLC's 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 |
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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