Correlation Between Haad Thip and Thai Vegetable
Can any of the company-specific risk be diversified away by investing in both Haad Thip 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 Haad Thip and Thai Vegetable 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 Vegetable Oil, you can compare the effects of market volatilities on Haad Thip 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 Haad Thip with a short position of Thai Vegetable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haad Thip and Thai Vegetable.
Diversification Opportunities for Haad Thip and Thai Vegetable
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Haad and Thai is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Haad Thip 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 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 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 Haad Thip i.e., Haad Thip and Thai Vegetable go up and down completely randomly.
Pair Corralation between Haad Thip and Thai Vegetable
Assuming the 90 days trading horizon Haad Thip is expected to generate 1.2 times less return on investment than Thai Vegetable. But when comparing it to its historical volatility, Haad Thip Public is 1.09 times less risky than Thai Vegetable. It trades about 0.03 of its potential returns per unit of risk. Thai Vegetable Oil is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,190 in Thai Vegetable Oil on September 1, 2024 and sell it today you would earn a total of 100.00 from holding Thai Vegetable Oil or generate 4.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haad Thip Public vs. Thai Vegetable Oil
Performance |
| Timeline |
| Haad Thip Public |
| Thai Vegetable Oil |
Haad Thip and Thai Vegetable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haad Thip and Thai Vegetable
The main advantage of trading using opposite Haad Thip and Thai Vegetable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haad Thip 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.| 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 Vegetable vs. Charoen Pokphand Foods | Thai Vegetable vs. Thai Union Group | Thai Vegetable vs. TISCO Financial Group | Thai Vegetable vs. Thanachart Capital 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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