Correlation Between Haad Thip and Thai Metal
Can any of the company-specific risk be diversified away by investing in both Haad Thip and Thai Metal 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 Haad Thip and Thai Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haad Thip Public and Thai Metal Drum, you can compare the effects of market volatilities on Haad Thip and Thai Metal 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 Haad Thip with a short position of Thai Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haad Thip and Thai Metal.
Diversification Opportunities for Haad Thip and Thai Metal
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Haad and Thai is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Haad Thip Public and Thai Metal Drum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Metal Drum and Haad Thip 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 Haad Thip Public are associated (or correlated) with Thai Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Metal Drum has no effect on the direction of Haad Thip i.e., Haad Thip and Thai Metal go up and down completely randomly.
Pair Corralation between Haad Thip and Thai Metal
Assuming the 90 days trading horizon Haad Thip Public is expected to under-perform the Thai Metal. In addition to that, Haad Thip is 1.39 times more volatile than Thai Metal Drum. It trades about -0.09 of its total potential returns per unit of risk. Thai Metal Drum is currently generating about 0.08 per unit of volatility. If you would invest 2,420 in Thai Metal Drum on September 1, 2024 and sell it today you would earn a total of 40.00 from holding Thai Metal Drum or generate 1.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haad Thip Public vs. Thai Metal Drum
Performance |
| Timeline |
| Haad Thip Public |
| Thai Metal Drum |
Haad Thip and Thai Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haad Thip and Thai Metal
The main advantage of trading using opposite Haad Thip and Thai Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haad Thip position performs unexpectedly, Thai Metal 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 Metal will offset losses from the drop in Thai Metal's long position.| Haad Thip vs. Charoen Pokphand Foods | Haad Thip vs. Carabao Group Public | Haad Thip vs. Home Product Center | Haad Thip vs. Ichitan Group Public |
| Thai Metal vs. Thantawan Industry Public | Thai Metal vs. Thitikorn Public | Thai Metal vs. Siam Steel Service | Thai Metal vs. Thai Vegetable Oil |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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