Correlation Between Thai Energy and Thai Group
Can any of the company-specific risk be diversified away by investing in both Thai Energy and Thai Group 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 Thai Group 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 Thai Group Holdings, you can compare the effects of market volatilities on Thai Energy and Thai Group 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 Thai Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Energy and Thai Group.
Diversification Opportunities for Thai Energy and Thai Group
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Thai and Thai is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Thai Energy Storage and Thai Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Group Holdings 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 Thai Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Group Holdings has no effect on the direction of Thai Energy i.e., Thai Energy and Thai Group go up and down completely randomly.
Pair Corralation between Thai Energy and Thai Group
Assuming the 90 days trading horizon Thai Energy Storage is expected to generate 1.0 times more return on investment than Thai Group. However, Thai Energy is 1.0 times more volatile than Thai Group Holdings. It trades about 0.05 of its potential returns per unit of risk. Thai Group Holdings is currently generating about 0.05 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 | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Energy Storage vs. Thai Group Holdings
Performance |
| Timeline |
| Thai Energy Storage |
| Thai Group Holdings |
Thai Energy and Thai Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Energy and Thai Group
The main advantage of trading using opposite Thai Energy and Thai Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Energy position performs unexpectedly, Thai Group 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 Thai Group will offset losses from the drop in Thai Group'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 |
| Thai Group vs. Ratchthani Leasing Public | Thai Group vs. TEAM Consulting Engineering | Thai Group vs. Thai President Foods | Thai Group vs. Thai Reinsurance 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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