Correlation Between Diamond Building and Thantawan Industry
Can any of the company-specific risk be diversified away by investing in both Diamond Building 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 Diamond Building and Thantawan Industry into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diamond Building Products and Thantawan Industry Public, you can compare the effects of market volatilities on Diamond Building 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 Diamond Building with a short position of Thantawan Industry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamond Building and Thantawan Industry.
Diversification Opportunities for Diamond Building and Thantawan Industry
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Diamond and Thantawan is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Diamond Building Products 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 Diamond Building 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 Diamond Building Products 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 Diamond Building i.e., Diamond Building and Thantawan Industry go up and down completely randomly.
Pair Corralation between Diamond Building and Thantawan Industry
Assuming the 90 days trading horizon Diamond Building Products is expected to generate 0.47 times more return on investment than Thantawan Industry. However, Diamond Building Products is 2.14 times less risky than Thantawan Industry. It trades about 0.03 of its potential returns per unit of risk. Thantawan Industry Public is currently generating about -0.01 per unit of risk. If you would invest 691.00 in Diamond Building Products on September 14, 2024 and sell it today you would earn a total of 69.00 from holding Diamond Building Products or generate 9.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diamond Building Products vs. Thantawan Industry Public
Performance |
| Timeline |
| Diamond Building Products |
| Thantawan Industry Public |
Diamond Building and Thantawan Industry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamond Building and Thantawan Industry
The main advantage of trading using opposite Diamond Building and Thantawan Industry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamond Building 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.| Diamond Building vs. Thantawan Industry Public | Diamond Building vs. The Erawan Group | Diamond Building vs. Jay Mart Public | Diamond Building vs. Airports of Thailand |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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