Correlation Between POSCO Thainox and Haad Thip
Can any of the company-specific risk be diversified away by investing in both POSCO Thainox 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 POSCO Thainox and Haad Thip into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Thainox Public and Haad Thip Public, you can compare the effects of market volatilities on POSCO Thainox 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 POSCO Thainox with a short position of Haad Thip. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Thainox and Haad Thip.
Diversification Opportunities for POSCO Thainox and Haad Thip
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between POSCO and Haad is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Thainox Public 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 POSCO Thainox 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 POSCO Thainox Public 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 POSCO Thainox i.e., POSCO Thainox and Haad Thip go up and down completely randomly.
Pair Corralation between POSCO Thainox and Haad Thip
Assuming the 90 days trading horizon POSCO Thainox Public is expected to generate 1.32 times more return on investment than Haad Thip. However, POSCO Thainox is 1.32 times more volatile than Haad Thip Public. It trades about -0.08 of its potential returns per unit of risk. Haad Thip Public is currently generating about -0.13 per unit of risk. If you would invest 54.00 in POSCO Thainox Public on August 27, 2024 and sell it today you would lose (2.00) from holding POSCO Thainox Public or give up 3.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
POSCO Thainox Public vs. Haad Thip Public
Performance |
| Timeline |
| POSCO Thainox Public |
| Haad Thip Public |
POSCO Thainox and Haad Thip Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Thainox and Haad Thip
The main advantage of trading using opposite POSCO Thainox and Haad Thip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Thainox 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.| POSCO Thainox vs. PTT Public | POSCO Thainox vs. PTT Exploration and | POSCO Thainox vs. CP ALL Public | POSCO Thainox vs. Kasikornbank Public |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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