Correlation Between TMBThanachart Bank and Hercules Capital
Can any of the company-specific risk be diversified away by investing in both TMBThanachart Bank and Hercules Capital 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 TMBThanachart Bank and Hercules Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TMBThanachart Bank Public and Hercules Capital, you can compare the effects of market volatilities on TMBThanachart Bank and Hercules Capital 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 TMBThanachart Bank with a short position of Hercules Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of TMBThanachart Bank and Hercules Capital.
Diversification Opportunities for TMBThanachart Bank and Hercules Capital
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TMBThanachart and Hercules is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding TMBThanachart Bank Public and Hercules Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hercules Capital and TMBThanachart Bank 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 TMBThanachart Bank Public are associated (or correlated) with Hercules Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hercules Capital has no effect on the direction of TMBThanachart Bank i.e., TMBThanachart Bank and Hercules Capital go up and down completely randomly.
Pair Corralation between TMBThanachart Bank and Hercules Capital
Assuming the 90 days trading horizon TMBThanachart Bank Public is expected to generate 2.36 times more return on investment than Hercules Capital. However, TMBThanachart Bank is 2.36 times more volatile than Hercules Capital. It trades about 0.06 of its potential returns per unit of risk. Hercules Capital is currently generating about 0.08 per unit of risk. If you would invest 4.80 in TMBThanachart Bank Public on September 25, 2024 and sell it today you would earn a total of 0.15 from holding TMBThanachart Bank Public or generate 3.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TMBThanachart Bank Public vs. Hercules Capital
Performance |
| Timeline |
| TMBThanachart Bank Public |
| Hercules Capital |
TMBThanachart Bank and Hercules Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TMBThanachart Bank and Hercules Capital
The main advantage of trading using opposite TMBThanachart Bank and Hercules Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TMBThanachart Bank position performs unexpectedly, Hercules Capital 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 Hercules Capital will offset losses from the drop in Hercules Capital's long position.| TMBThanachart Bank vs. China Merchants Bank | TMBThanachart Bank vs. HDFC Bank Limited | TMBThanachart Bank vs. ICICI Bank Limited | TMBThanachart Bank vs. PT Bank Central |
| Hercules Capital vs. HEMISPHERE EGY | Hercules Capital vs. Spirent Communications plc | Hercules Capital vs. Sixt Leasing SE | Hercules Capital vs. United Internet AG |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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