Correlation Between Thai Energy and Thanachart Capital
Can any of the company-specific risk be diversified away by investing in both Thai Energy and Thanachart Capital 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 Thanachart Capital 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 Thanachart Capital Public, you can compare the effects of market volatilities on Thai Energy and Thanachart Capital 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 Thanachart Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Energy and Thanachart Capital.
Diversification Opportunities for Thai Energy and Thanachart Capital
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Thai and Thanachart is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Thai Energy Storage and Thanachart Capital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thanachart Capital Public 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 Thanachart Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thanachart Capital Public has no effect on the direction of Thai Energy i.e., Thai Energy and Thanachart Capital go up and down completely randomly.
Pair Corralation between Thai Energy and Thanachart Capital
Assuming the 90 days trading horizon Thai Energy Storage is expected to generate 45.93 times more return on investment than Thanachart Capital. However, Thai Energy is 45.93 times more volatile than Thanachart Capital Public. It trades about 0.05 of its potential returns per unit of risk. Thanachart Capital Public is currently generating about 0.02 per unit of risk. If you would invest 5,770 in Thai Energy Storage on August 31, 2024 and sell it today you would lose (395.00) from holding Thai Energy Storage or give up 6.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Thai Energy Storage vs. Thanachart Capital Public
Performance |
| Timeline |
| Thai Energy Storage |
| Thanachart Capital Public |
Thai Energy and Thanachart Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Energy and Thanachart Capital
The main advantage of trading using opposite Thai Energy and Thanachart Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Energy position performs unexpectedly, Thanachart Capital 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 Thanachart Capital will offset losses from the drop in Thanachart Capital's long position.| Thai Energy vs. AJ Advance Technology | Thai Energy vs. Cpt Drives Power | Thai Energy vs. Asia Metal Public | Thai Energy vs. The Erawan Group |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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