Correlation Between AIM Industrial and Thai Wah
Can any of the company-specific risk be diversified away by investing in both AIM Industrial and Thai Wah 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 AIM Industrial and Thai Wah into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIM Industrial Growth and Thai Wah Public, you can compare the effects of market volatilities on AIM Industrial and Thai Wah 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 AIM Industrial with a short position of Thai Wah. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIM Industrial and Thai Wah.
Diversification Opportunities for AIM Industrial and Thai Wah
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AIM and Thai is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding AIM Industrial Growth and Thai Wah Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Wah Public and AIM Industrial 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 AIM Industrial Growth are associated (or correlated) with Thai Wah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Wah Public has no effect on the direction of AIM Industrial i.e., AIM Industrial and Thai Wah go up and down completely randomly.
Pair Corralation between AIM Industrial and Thai Wah
Assuming the 90 days trading horizon AIM Industrial Growth is expected to generate 0.31 times more return on investment than Thai Wah. However, AIM Industrial Growth is 3.25 times less risky than Thai Wah. It trades about 0.07 of its potential returns per unit of risk. Thai Wah Public is currently generating about -0.42 per unit of risk. If you would invest 1,040 in AIM Industrial Growth on October 20, 2024 and sell it today you would earn a total of 10.00 from holding AIM Industrial Growth or generate 0.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AIM Industrial Growth vs. Thai Wah Public
Performance |
| Timeline |
| AIM Industrial Growth |
| Thai Wah Public |
AIM Industrial and Thai Wah Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIM Industrial and Thai Wah
The main advantage of trading using opposite AIM Industrial and Thai Wah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIM Industrial position performs unexpectedly, Thai Wah 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 Wah will offset losses from the drop in Thai Wah's long position.| AIM Industrial vs. Amata Summit Growth | AIM Industrial vs. WHA Premium Growth | AIM Industrial vs. Digital Telecommunications Infrastructure | AIM Industrial vs. Quality Houses Property |
| Thai Wah vs. Inoue Rubber Public | Thai Wah vs. Thonburi Healthcare Grp | Thai Wah vs. Panjawattana Plastic Public | Thai Wah vs. North East Rubbers |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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