Correlation Between TMBThanachart Bank and EON SE
Can any of the company-specific risk be diversified away by investing in both TMBThanachart Bank and EON SE 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 EON SE 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 EON SE, you can compare the effects of market volatilities on TMBThanachart Bank and EON SE 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 EON SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of TMBThanachart Bank and EON SE.
Diversification Opportunities for TMBThanachart Bank and EON SE
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between TMBThanachart and EON is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding TMBThanachart Bank Public and EON SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EON SE 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 EON SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EON SE has no effect on the direction of TMBThanachart Bank i.e., TMBThanachart Bank and EON SE go up and down completely randomly.
Pair Corralation between TMBThanachart Bank and EON SE
Assuming the 90 days trading horizon TMBThanachart Bank Public is expected to generate 0.91 times more return on investment than EON SE. However, TMBThanachart Bank Public is 1.1 times less risky than EON SE. It trades about 0.0 of its potential returns per unit of risk. EON SE is currently generating about -0.08 per unit of risk. If you would invest 4.70 in TMBThanachart Bank Public on September 1, 2024 and sell it today you would earn a total of 0.00 from holding TMBThanachart Bank Public or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
TMBThanachart Bank Public vs. EON SE
Performance |
| Timeline |
| TMBThanachart Bank Public |
| EON SE |
TMBThanachart Bank and EON SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TMBThanachart Bank and EON SE
The main advantage of trading using opposite TMBThanachart Bank and EON SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TMBThanachart Bank position performs unexpectedly, EON SE 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 EON SE will offset losses from the drop in EON SE's long position.| TMBThanachart Bank vs. China Merchants Bank | TMBThanachart Bank vs. PT Bank Central | TMBThanachart Bank vs. State Bank of |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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