Correlation Between TMBThanachart Bank and RATIONAL Aktiengesellscha
Can any of the company-specific risk be diversified away by investing in both TMBThanachart Bank and RATIONAL Aktiengesellscha 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 RATIONAL Aktiengesellscha 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 RATIONAL Aktiengesellschaft, you can compare the effects of market volatilities on TMBThanachart Bank and RATIONAL Aktiengesellscha 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 RATIONAL Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of TMBThanachart Bank and RATIONAL Aktiengesellscha.
Diversification Opportunities for TMBThanachart Bank and RATIONAL Aktiengesellscha
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between TMBThanachart and RATIONAL is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding TMBThanachart Bank Public and RATIONAL Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RATIONAL Aktiengesellscha 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 RATIONAL Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RATIONAL Aktiengesellscha has no effect on the direction of TMBThanachart Bank i.e., TMBThanachart Bank and RATIONAL Aktiengesellscha go up and down completely randomly.
Pair Corralation between TMBThanachart Bank and RATIONAL Aktiengesellscha
Assuming the 90 days trading horizon TMBThanachart Bank Public is expected to generate 2.87 times more return on investment than RATIONAL Aktiengesellscha. However, TMBThanachart Bank is 2.87 times more volatile than RATIONAL Aktiengesellschaft. It trades about 0.03 of its potential returns per unit of risk. RATIONAL Aktiengesellschaft is currently generating about -0.08 per unit of risk. If you would invest 4.95 in TMBThanachart Bank Public on October 24, 2024 and sell it today you would earn a total of 0.05 from holding TMBThanachart Bank Public or generate 1.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TMBThanachart Bank Public vs. RATIONAL Aktiengesellschaft
Performance |
| Timeline |
| TMBThanachart Bank Public |
| RATIONAL Aktiengesellscha |
TMBThanachart Bank and RATIONAL Aktiengesellscha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TMBThanachart Bank and RATIONAL Aktiengesellscha
The main advantage of trading using opposite TMBThanachart Bank and RATIONAL Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TMBThanachart Bank position performs unexpectedly, RATIONAL Aktiengesellscha 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 RATIONAL Aktiengesellscha will offset losses from the drop in RATIONAL Aktiengesellscha's long position.| TMBThanachart Bank vs. NTG Nordic Transport | TMBThanachart Bank vs. IMAGIN MEDICAL INC | TMBThanachart Bank vs. Inspire Medical Systems | TMBThanachart Bank vs. Genertec Universal Medical |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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