Correlation Between Asia Metal and Thantawan Industry
Can any of the company-specific risk be diversified away by investing in both Asia Metal and Thantawan Industry 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 Asia Metal and Thantawan Industry into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Metal Public and Thantawan Industry Public, you can compare the effects of market volatilities on Asia Metal and Thantawan Industry 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 Asia Metal with a short position of Thantawan Industry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Metal and Thantawan Industry.
Diversification Opportunities for Asia Metal and Thantawan Industry
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Asia and Thantawan is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Asia Metal Public and Thantawan Industry Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thantawan Industry Public and Asia Metal 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 Asia Metal Public are associated (or correlated) with Thantawan Industry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thantawan Industry Public has no effect on the direction of Asia Metal i.e., Asia Metal and Thantawan Industry go up and down completely randomly.
Pair Corralation between Asia Metal and Thantawan Industry
Assuming the 90 days trading horizon Asia Metal Public is expected to under-perform the Thantawan Industry. In addition to that, Asia Metal is 2.5 times more volatile than Thantawan Industry Public. It trades about -0.26 of its total potential returns per unit of risk. Thantawan Industry Public is currently generating about -0.05 per unit of volatility. If you would invest 2,900 in Thantawan Industry Public on September 12, 2024 and sell it today you would lose (25.00) from holding Thantawan Industry Public or give up 0.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Metal Public vs. Thantawan Industry Public
Performance |
| Timeline |
| Asia Metal Public |
| Thantawan Industry Public |
Asia Metal and Thantawan Industry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Metal and Thantawan Industry
The main advantage of trading using opposite Asia Metal and Thantawan Industry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Metal position performs unexpectedly, Thantawan Industry 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 Thantawan Industry will offset losses from the drop in Thantawan Industry's long position.| Asia Metal vs. Thantawan Industry Public | Asia Metal vs. The Erawan Group | Asia Metal vs. Jay Mart Public | Asia Metal vs. Airports of Thailand |
| Thantawan Industry vs. The Erawan Group | Thantawan Industry vs. Jay Mart Public | Thantawan Industry vs. Airports of Thailand | Thantawan Industry vs. Eastern Technical Engineering |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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