Correlation Between NSL Foods and Thai Rung
Can any of the company-specific risk be diversified away by investing in both NSL Foods and Thai Rung 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 NSL Foods and Thai Rung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NSL Foods Public and Thai Rung Union, you can compare the effects of market volatilities on NSL Foods and Thai Rung 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 NSL Foods with a short position of Thai Rung. Check out your portfolio center. Please also check ongoing floating volatility patterns of NSL Foods and Thai Rung.
Diversification Opportunities for NSL Foods and Thai Rung
Weak diversification
The 3 months correlation between NSL and Thai is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding NSL Foods Public and Thai Rung Union in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Rung Union and NSL Foods 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 NSL Foods Public are associated (or correlated) with Thai Rung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Rung Union has no effect on the direction of NSL Foods i.e., NSL Foods and Thai Rung go up and down completely randomly.
Pair Corralation between NSL Foods and Thai Rung
Assuming the 90 days trading horizon NSL Foods Public is expected to generate 3.88 times more return on investment than Thai Rung. However, NSL Foods is 3.88 times more volatile than Thai Rung Union. It trades about -0.02 of its potential returns per unit of risk. Thai Rung Union is currently generating about -0.1 per unit of risk. If you would invest 3,300 in NSL Foods Public on August 29, 2024 and sell it today you would lose (50.00) from holding NSL Foods Public or give up 1.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
NSL Foods Public vs. Thai Rung Union
Performance |
| Timeline |
| NSL Foods Public |
| Thai Rung Union |
NSL Foods and Thai Rung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NSL Foods and Thai Rung
The main advantage of trading using opposite NSL Foods and Thai Rung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NSL Foods position performs unexpectedly, Thai Rung 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 Rung will offset losses from the drop in Thai Rung's long position.| NSL Foods vs. Kang Yong Electric | NSL Foods vs. Thai Rung Union | NSL Foods vs. Grande Asset Hotels | NSL Foods vs. Ama Marine Public |
| Thai Rung vs. CP ALL Public | Thai Rung vs. Bangkok Dusit Medical | Thai Rung vs. Central Pattana Public | Thai Rung vs. Advanced Info Service |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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