Correlation Between Com7 PCL and Thai Union
Can any of the company-specific risk be diversified away by investing in both Com7 PCL and Thai Union 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 Thai Union into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Com7 PCL and Thai Union Group, you can compare the effects of market volatilities on Com7 PCL and Thai Union 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 Thai Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of Com7 PCL and Thai Union.
Diversification Opportunities for Com7 PCL and Thai Union
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Com7 and Thai is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Com7 PCL and Thai Union Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Union Group 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 Thai Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Union Group has no effect on the direction of Com7 PCL i.e., Com7 PCL and Thai Union go up and down completely randomly.
Pair Corralation between Com7 PCL and Thai Union
Assuming the 90 days trading horizon Com7 PCL is expected to under-perform the Thai Union. But the stock apears to be less risky and, when comparing its historical volatility, Com7 PCL is 1.04 times less risky than Thai Union. The stock trades about -0.29 of its potential returns per unit of risk. The Thai Union Group is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 1,220 in Thai Union Group on October 23, 2024 and sell it today you would lose (20.00) from holding Thai Union Group or give up 1.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Com7 PCL vs. Thai Union Group
Performance |
| Timeline |
| Com7 PCL |
| Thai Union Group |
Com7 PCL and Thai Union Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Com7 PCL and Thai Union
The main advantage of trading using opposite Com7 PCL and Thai Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Com7 PCL position performs unexpectedly, Thai Union 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 Union will offset losses from the drop in Thai Union's 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 |
| Thai Union vs. Charoen Pokphand Foods | Thai Union vs. CP ALL Public | Thai Union vs. Minor International Public | Thai Union vs. Advanced Info Service |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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