Correlation Between TMBThanachart Bank and China Merchants
Can any of the company-specific risk be diversified away by investing in both TMBThanachart Bank and China Merchants 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 China Merchants 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 China Merchants Bank, you can compare the effects of market volatilities on TMBThanachart Bank and China Merchants 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 China Merchants. Check out your portfolio center. Please also check ongoing floating volatility patterns of TMBThanachart Bank and China Merchants.
Diversification Opportunities for TMBThanachart Bank and China Merchants
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TMBThanachart and China is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding TMBThanachart Bank Public and China Merchants Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Merchants Bank 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 China Merchants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Merchants Bank has no effect on the direction of TMBThanachart Bank i.e., TMBThanachart Bank and China Merchants go up and down completely randomly.
Pair Corralation between TMBThanachart Bank and China Merchants
Assuming the 90 days trading horizon TMBThanachart Bank Public is expected to generate 0.45 times more return on investment than China Merchants. However, TMBThanachart Bank Public is 2.22 times less risky than China Merchants. It trades about 0.01 of its potential returns per unit of risk. China Merchants Bank is currently generating about -0.12 per unit of risk. If you would invest 4.70 in TMBThanachart Bank Public on September 3, 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TMBThanachart Bank Public vs. China Merchants Bank
Performance |
| Timeline |
| TMBThanachart Bank Public |
| China Merchants Bank |
TMBThanachart Bank and China Merchants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TMBThanachart Bank and China Merchants
The main advantage of trading using opposite TMBThanachart Bank and China Merchants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TMBThanachart Bank position performs unexpectedly, China Merchants 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 China Merchants will offset losses from the drop in China Merchants' long position.| TMBThanachart Bank vs. CVS Health | TMBThanachart Bank vs. EPSILON HEALTHCARE LTD | TMBThanachart Bank vs. Liberty Broadband | TMBThanachart Bank vs. Gold Road Resources |
| China Merchants vs. Air New Zealand | China Merchants vs. MYFAIR GOLD P | China Merchants vs. SEI INVESTMENTS | China Merchants vs. ECHO INVESTMENT ZY |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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