Correlation Between TMBThanachart Bank and TRAVEL +
Can any of the company-specific risk be diversified away by investing in both TMBThanachart Bank and TRAVEL + 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 TRAVEL + 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 TRAVEL LEISURE DL 01, you can compare the effects of market volatilities on TMBThanachart Bank and TRAVEL + 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 TRAVEL +. Check out your portfolio center. Please also check ongoing floating volatility patterns of TMBThanachart Bank and TRAVEL +.
Diversification Opportunities for TMBThanachart Bank and TRAVEL +
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between TMBThanachart and TRAVEL is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding TMBThanachart Bank Public and TRAVEL LEISURE DL 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRAVEL LEISURE DL 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 TRAVEL +. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRAVEL LEISURE DL has no effect on the direction of TMBThanachart Bank i.e., TMBThanachart Bank and TRAVEL + go up and down completely randomly.
Pair Corralation between TMBThanachart Bank and TRAVEL +
Assuming the 90 days trading horizon TMBThanachart Bank Public is expected to under-perform the TRAVEL +. But the stock apears to be less risky and, when comparing its historical volatility, TMBThanachart Bank Public is 1.73 times less risky than TRAVEL +. The stock trades about -0.04 of its potential returns per unit of risk. The TRAVEL LEISURE DL 01 is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 4,480 in TRAVEL LEISURE DL 01 on August 31, 2024 and sell it today you would earn a total of 770.00 from holding TRAVEL LEISURE DL 01 or generate 17.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TMBThanachart Bank Public vs. TRAVEL LEISURE DL 01
Performance |
| Timeline |
| TMBThanachart Bank Public |
| TRAVEL LEISURE DL |
TMBThanachart Bank and TRAVEL + Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TMBThanachart Bank and TRAVEL +
The main advantage of trading using opposite TMBThanachart Bank and TRAVEL + positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TMBThanachart Bank position performs unexpectedly, TRAVEL + 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 TRAVEL + will offset losses from the drop in TRAVEL +'s long position.| TMBThanachart Bank vs. Wizz Air Holdings | TMBThanachart Bank vs. URBAN OUTFITTERS | TMBThanachart Bank vs. Corsair Gaming | TMBThanachart Bank vs. Cleanaway Waste Management |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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