Correlation Between Nfc PLC and Thai Rayon
Can any of the company-specific risk be diversified away by investing in both Nfc PLC and Thai Rayon 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 Nfc PLC and Thai Rayon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nfc PLC and Thai Rayon Public, you can compare the effects of market volatilities on Nfc PLC and Thai Rayon 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 Nfc PLC with a short position of Thai Rayon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nfc PLC and Thai Rayon.
Diversification Opportunities for Nfc PLC and Thai Rayon
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nfc and Thai is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Nfc PLC and Thai Rayon Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Rayon Public and Nfc PLC 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 Nfc PLC are associated (or correlated) with Thai Rayon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Rayon Public has no effect on the direction of Nfc PLC i.e., Nfc PLC and Thai Rayon go up and down completely randomly.
Pair Corralation between Nfc PLC and Thai Rayon
If you would invest 3,875 in Thai Rayon Public on October 23, 2024 and sell it today you would earn a total of 0.00 from holding Thai Rayon Public or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Nfc PLC vs. Thai Rayon Public
Performance |
| Timeline |
| Nfc PLC |
| Thai Rayon Public |
Nfc PLC and Thai Rayon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nfc PLC and Thai Rayon
The main advantage of trading using opposite Nfc PLC and Thai Rayon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nfc PLC position performs unexpectedly, Thai Rayon 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 Rayon will offset losses from the drop in Thai Rayon's long position.| Nfc PLC vs. Lam Soon Public | Nfc PLC vs. Newcity Public | Nfc PLC vs. Metro Systems | Nfc PLC vs. Nonthavej Hospital Public |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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