Correlation Between GFPT Public and Thai Vegetable
Can any of the company-specific risk be diversified away by investing in both GFPT Public and Thai Vegetable 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 GFPT Public and Thai Vegetable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GFPT Public and Thai Vegetable Oil, you can compare the effects of market volatilities on GFPT Public and Thai Vegetable 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 GFPT Public with a short position of Thai Vegetable. Check out your portfolio center. Please also check ongoing floating volatility patterns of GFPT Public and Thai Vegetable.
Diversification Opportunities for GFPT Public and Thai Vegetable
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between GFPT and Thai is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding GFPT Public and Thai Vegetable Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Vegetable Oil and GFPT Public 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 GFPT Public are associated (or correlated) with Thai Vegetable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Vegetable Oil has no effect on the direction of GFPT Public i.e., GFPT Public and Thai Vegetable go up and down completely randomly.
Pair Corralation between GFPT Public and Thai Vegetable
Assuming the 90 days trading horizon GFPT Public is expected to under-perform the Thai Vegetable. But the stock apears to be less risky and, when comparing its historical volatility, GFPT Public is 112.56 times less risky than Thai Vegetable. The stock trades about -0.16 of its potential returns per unit of risk. The Thai Vegetable Oil is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,535 in Thai Vegetable Oil on September 13, 2024 and sell it today you would lose (245.00) from holding Thai Vegetable Oil or give up 9.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.5% |
| Values | Daily Returns |
GFPT Public vs. Thai Vegetable Oil
Performance |
| Timeline |
| GFPT Public |
| Thai Vegetable Oil |
GFPT Public and Thai Vegetable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GFPT Public and Thai Vegetable
The main advantage of trading using opposite GFPT Public and Thai Vegetable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GFPT Public position performs unexpectedly, Thai Vegetable 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 Vegetable will offset losses from the drop in Thai Vegetable's long position.| GFPT Public vs. Dynasty Ceramic Public | GFPT Public vs. Haad Thip Public | GFPT Public vs. The Erawan Group | GFPT Public vs. Jay Mart Public |
| Thai Vegetable vs. Thai Union Group | Thai Vegetable vs. Charoen Pokphand Foods | Thai Vegetable vs. CP ALL Public | Thai Vegetable vs. Intouch Holdings Public |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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