Correlation Between Major Cineplex and Thoresen Thai
Can any of the company-specific risk be diversified away by investing in both Major Cineplex and Thoresen Thai 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 Major Cineplex and Thoresen Thai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Major Cineplex Group and Thoresen Thai Agencies, you can compare the effects of market volatilities on Major Cineplex and Thoresen Thai 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 Major Cineplex with a short position of Thoresen Thai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Major Cineplex and Thoresen Thai.
Diversification Opportunities for Major Cineplex and Thoresen Thai
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Major and Thoresen is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Major Cineplex Group and Thoresen Thai Agencies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thoresen Thai Agencies and Major Cineplex 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 Major Cineplex Group are associated (or correlated) with Thoresen Thai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thoresen Thai Agencies has no effect on the direction of Major Cineplex i.e., Major Cineplex and Thoresen Thai go up and down completely randomly.
Pair Corralation between Major Cineplex and Thoresen Thai
Assuming the 90 days trading horizon Major Cineplex Group is expected to generate 0.74 times more return on investment than Thoresen Thai. However, Major Cineplex Group is 1.34 times less risky than Thoresen Thai. It trades about -0.01 of its potential returns per unit of risk. Thoresen Thai Agencies is currently generating about -0.01 per unit of risk. If you would invest 1,696 in Major Cineplex Group on September 12, 2024 and sell it today you would lose (216.00) from holding Major Cineplex Group or give up 12.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Major Cineplex Group vs. Thoresen Thai Agencies
Performance |
| Timeline |
| Major Cineplex Group |
| Thoresen Thai Agencies |
Major Cineplex and Thoresen Thai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Major Cineplex and Thoresen Thai
The main advantage of trading using opposite Major Cineplex and Thoresen Thai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Major Cineplex position performs unexpectedly, Thoresen Thai 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 Thoresen Thai will offset losses from the drop in Thoresen Thai's long position.| Major Cineplex vs. Home Product Center | Major Cineplex vs. Land and Houses | Major Cineplex vs. Minor International Public | Major Cineplex vs. Advanced Info Service |
| Thoresen Thai vs. Precious Shipping Public | Thoresen Thai vs. Regional Container Lines | Thoresen Thai vs. PTT Public | Thoresen Thai vs. The Siam Cement |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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