Correlation Between Home Product and Haad Thip
Can any of the company-specific risk be diversified away by investing in both Home Product and Haad Thip 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 Home Product and Haad Thip into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Product Center and Haad Thip Public, you can compare the effects of market volatilities on Home Product and Haad Thip 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 Home Product with a short position of Haad Thip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Product and Haad Thip.
Diversification Opportunities for Home Product and Haad Thip
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Home and Haad is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Home Product Center and Haad Thip Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haad Thip Public and Home Product 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 Home Product Center are associated (or correlated) with Haad Thip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haad Thip Public has no effect on the direction of Home Product i.e., Home Product and Haad Thip go up and down completely randomly.
Pair Corralation between Home Product and Haad Thip
Assuming the 90 days trading horizon Home Product Center is expected to generate 4.77 times more return on investment than Haad Thip. However, Home Product is 4.77 times more volatile than Haad Thip Public. It trades about -0.04 of its potential returns per unit of risk. Haad Thip Public is currently generating about -0.22 per unit of risk. If you would invest 935.00 in Home Product Center on November 2, 2024 and sell it today you would lose (25.00) from holding Home Product Center or give up 2.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Home Product Center vs. Haad Thip Public
Performance |
| Timeline |
| Home Product Center |
| Haad Thip Public |
Home Product and Haad Thip Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Product and Haad Thip
The main advantage of trading using opposite Home Product and Haad Thip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Product position performs unexpectedly, Haad Thip 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 Haad Thip will offset losses from the drop in Haad Thip's long position.| Home Product vs. CP ALL Public | Home Product vs. Bangkok Dusit Medical | Home Product vs. Central Pattana Public | Home Product vs. Advanced Info Service |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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