Correlation Between Mega Lifesciences and Thai Vegetable
Can any of the company-specific risk be diversified away by investing in both Mega Lifesciences 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 Mega Lifesciences and Thai Vegetable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mega Lifesciences Public and Thai Vegetable Oil, you can compare the effects of market volatilities on Mega Lifesciences 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 Mega Lifesciences with a short position of Thai Vegetable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mega Lifesciences and Thai Vegetable.
Diversification Opportunities for Mega Lifesciences and Thai Vegetable
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Mega and Thai is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Mega Lifesciences 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 Mega Lifesciences 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 Mega Lifesciences 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 Mega Lifesciences i.e., Mega Lifesciences and Thai Vegetable go up and down completely randomly.
Pair Corralation between Mega Lifesciences and Thai Vegetable
Assuming the 90 days trading horizon Mega Lifesciences Public is expected to generate 1.29 times more return on investment than Thai Vegetable. However, Mega Lifesciences is 1.29 times more volatile than Thai Vegetable Oil. It trades about -0.25 of its potential returns per unit of risk. Thai Vegetable Oil is currently generating about -0.33 per unit of risk. If you would invest 3,900 in Mega Lifesciences Public on September 2, 2024 and sell it today you would lose (375.00) from holding Mega Lifesciences Public or give up 9.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mega Lifesciences Public vs. Thai Vegetable Oil
Performance |
| Timeline |
| Mega Lifesciences Public |
| Thai Vegetable Oil |
Mega Lifesciences and Thai Vegetable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mega Lifesciences and Thai Vegetable
The main advantage of trading using opposite Mega Lifesciences and Thai Vegetable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mega Lifesciences 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.| Mega Lifesciences vs. AP Public | Mega Lifesciences vs. Advanced Information Technology | Mega Lifesciences vs. AJ Plast Public | Mega Lifesciences vs. Berli Jucker Public |
| Thai Vegetable vs. Thai Union Group | Thai Vegetable vs. Charoen Pokphand Foods | Thai Vegetable vs. CP ALL Public | Thai Vegetable vs. Intouch Holdings 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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