Correlation Between TAL Education and Polyplex (Thailand)
Can any of the company-specific risk be diversified away by investing in both TAL Education and Polyplex (Thailand) 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 TAL Education and Polyplex (Thailand) into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TAL Education Group and Polyplex Public, you can compare the effects of market volatilities on TAL Education and Polyplex (Thailand) 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 TAL Education with a short position of Polyplex (Thailand). Check out your portfolio center. Please also check ongoing floating volatility patterns of TAL Education and Polyplex (Thailand).
Diversification Opportunities for TAL Education and Polyplex (Thailand)
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between TAL and Polyplex is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding TAL Education Group and Polyplex Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polyplex (Thailand) and TAL Education 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 TAL Education Group are associated (or correlated) with Polyplex (Thailand). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polyplex (Thailand) has no effect on the direction of TAL Education i.e., TAL Education and Polyplex (Thailand) go up and down completely randomly.
Pair Corralation between TAL Education and Polyplex (Thailand)
Assuming the 90 days trading horizon TAL Education Group is expected to under-perform the Polyplex (Thailand). But the stock apears to be less risky and, when comparing its historical volatility, TAL Education Group is 7.74 times less risky than Polyplex (Thailand). The stock trades about -0.04 of its potential returns per unit of risk. The Polyplex Public is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Polyplex Public on September 1, 2024 and sell it today you would earn a total of 19.00 from holding Polyplex Public or generate 135.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
TAL Education Group vs. Polyplex Public
Performance |
| Timeline |
| TAL Education Group |
| Polyplex (Thailand) |
TAL Education and Polyplex (Thailand) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TAL Education and Polyplex (Thailand)
The main advantage of trading using opposite TAL Education and Polyplex (Thailand) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TAL Education position performs unexpectedly, Polyplex (Thailand) 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 Polyplex (Thailand) will offset losses from the drop in Polyplex (Thailand)'s long position.| TAL Education vs. MIRAMAR HOTEL INV | TAL Education vs. HYATT HOTELS A | TAL Education vs. Summit Hotel Properties | TAL Education vs. CHINA EDUCATION GROUP |
| Polyplex (Thailand) vs. Strategic Education | Polyplex (Thailand) vs. Xinhua Winshare Publishing | Polyplex (Thailand) vs. TAL Education Group | Polyplex (Thailand) vs. BLUESCOPE STEEL |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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