Correlation Between POSCO Thainox and Thantawan Industry
Can any of the company-specific risk be diversified away by investing in both POSCO Thainox and Thantawan Industry 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 Thantawan Industry 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 Thantawan Industry Public, you can compare the effects of market volatilities on POSCO Thainox and Thantawan Industry 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 Thantawan Industry. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Thainox and Thantawan Industry.
Diversification Opportunities for POSCO Thainox and Thantawan Industry
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between POSCO and Thantawan is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Thainox Public and Thantawan Industry Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thantawan Industry 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 Thantawan Industry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thantawan Industry Public has no effect on the direction of POSCO Thainox i.e., POSCO Thainox and Thantawan Industry go up and down completely randomly.
Pair Corralation between POSCO Thainox and Thantawan Industry
Assuming the 90 days trading horizon POSCO Thainox Public is expected to generate 52.16 times more return on investment than Thantawan Industry. However, POSCO Thainox is 52.16 times more volatile than Thantawan Industry Public. It trades about 0.06 of its potential returns per unit of risk. Thantawan Industry Public is currently generating about 0.04 per unit of risk. If you would invest 55.00 in POSCO Thainox Public on September 14, 2024 and sell it today you would lose (6.00) from holding POSCO Thainox Public or give up 10.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
POSCO Thainox Public vs. Thantawan Industry Public
Performance |
| Timeline |
| POSCO Thainox Public |
| Thantawan Industry Public |
POSCO Thainox and Thantawan Industry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Thainox and Thantawan Industry
The main advantage of trading using opposite POSCO Thainox and Thantawan Industry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Thainox position performs unexpectedly, Thantawan Industry 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 Thantawan Industry will offset losses from the drop in Thantawan Industry's long position.| POSCO Thainox vs. Internet Thailand Public | POSCO Thainox vs. Millcon Steel Public | POSCO Thainox vs. G J Steel | POSCO Thainox vs. Italian Thai Development Public |
| Thantawan Industry vs. Thai Metal Drum | Thantawan Industry vs. Haad Thip Public | Thantawan Industry vs. Sahamitr Pressure Container | Thantawan Industry vs. Ratchthani Leasing 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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