Correlation Between Com7 PCL and TKS Technologies
Can any of the company-specific risk be diversified away by investing in both Com7 PCL and TKS Technologies 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 Com7 PCL and TKS Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Com7 PCL and TKS Technologies Public, you can compare the effects of market volatilities on Com7 PCL and TKS Technologies 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 Com7 PCL with a short position of TKS Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Com7 PCL and TKS Technologies.
Diversification Opportunities for Com7 PCL and TKS Technologies
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Com7 and TKS is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Com7 PCL and TKS Technologies Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TKS Technologies Public and Com7 PCL 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 Com7 PCL are associated (or correlated) with TKS Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TKS Technologies Public has no effect on the direction of Com7 PCL i.e., Com7 PCL and TKS Technologies go up and down completely randomly.
Pair Corralation between Com7 PCL and TKS Technologies
Assuming the 90 days trading horizon Com7 PCL is expected to under-perform the TKS Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Com7 PCL is 19.7 times less risky than TKS Technologies. The stock trades about -0.01 of its potential returns per unit of risk. The TKS Technologies Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,271 in TKS Technologies Public on October 24, 2024 and sell it today you would lose (716.00) from holding TKS Technologies Public or give up 56.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Com7 PCL vs. TKS Technologies Public
Performance |
| Timeline |
| Com7 PCL |
| TKS Technologies Public |
Com7 PCL and TKS Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Com7 PCL and TKS Technologies
The main advantage of trading using opposite Com7 PCL and TKS Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Com7 PCL position performs unexpectedly, TKS Technologies 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 TKS Technologies will offset losses from the drop in TKS Technologies' long position.| Com7 PCL vs. CP ALL Public | Com7 PCL vs. Home Product Center | Com7 PCL vs. Minor International Public | Com7 PCL vs. Bangkok Dusit Medical |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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