Correlation Between Namwiwat Medical and TRC Construction
Can any of the company-specific risk be diversified away by investing in both Namwiwat Medical and TRC Construction 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 Namwiwat Medical and TRC Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Namwiwat Medical and TRC Construction Public, you can compare the effects of market volatilities on Namwiwat Medical and TRC Construction 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 Namwiwat Medical with a short position of TRC Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Namwiwat Medical and TRC Construction.
Diversification Opportunities for Namwiwat Medical and TRC Construction
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Namwiwat and TRC is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Namwiwat Medical and TRC Construction Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRC Construction Public and Namwiwat Medical 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 Namwiwat Medical are associated (or correlated) with TRC Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRC Construction Public has no effect on the direction of Namwiwat Medical i.e., Namwiwat Medical and TRC Construction go up and down completely randomly.
Pair Corralation between Namwiwat Medical and TRC Construction
Assuming the 90 days trading horizon Namwiwat Medical is expected to generate 0.12 times more return on investment than TRC Construction. However, Namwiwat Medical is 8.34 times less risky than TRC Construction. It trades about -0.03 of its potential returns per unit of risk. TRC Construction Public is currently generating about -0.03 per unit of risk. If you would invest 450.00 in Namwiwat Medical on September 4, 2024 and sell it today you would lose (4.00) from holding Namwiwat Medical or give up 0.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Namwiwat Medical vs. TRC Construction Public
Performance |
| Timeline |
| Namwiwat Medical |
| TRC Construction Public |
Namwiwat Medical and TRC Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Namwiwat Medical and TRC Construction
The main advantage of trading using opposite Namwiwat Medical and TRC Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Namwiwat Medical position performs unexpectedly, TRC Construction 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 TRC Construction will offset losses from the drop in TRC Construction's long position.| Namwiwat Medical vs. Delta Electronics Public | Namwiwat Medical vs. Delta Electronics Public | Namwiwat Medical vs. Airports of Thailand | Namwiwat Medical vs. Airports of Thailand |
| TRC Construction vs. Tata Steel Public | TRC Construction vs. TTCL Public | TRC Construction vs. Thaire Life Assurance | TRC Construction vs. Thaifoods Group 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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