Correlation Between Pato Chemical and Thai Coating
Can any of the company-specific risk be diversified away by investing in both Pato Chemical and Thai Coating 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 Pato Chemical and Thai Coating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pato Chemical Industry and Thai Coating Industrial, you can compare the effects of market volatilities on Pato Chemical and Thai Coating 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 Pato Chemical with a short position of Thai Coating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pato Chemical and Thai Coating.
Diversification Opportunities for Pato Chemical and Thai Coating
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pato and Thai is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Pato Chemical Industry and Thai Coating Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Coating Industrial and Pato Chemical 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 Pato Chemical Industry are associated (or correlated) with Thai Coating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Coating Industrial has no effect on the direction of Pato Chemical i.e., Pato Chemical and Thai Coating go up and down completely randomly.
Pair Corralation between Pato Chemical and Thai Coating
Assuming the 90 days trading horizon Pato Chemical Industry is expected to under-perform the Thai Coating. But the stock apears to be less risky and, when comparing its historical volatility, Pato Chemical Industry is 3.9 times less risky than Thai Coating. The stock trades about -0.02 of its potential returns per unit of risk. The Thai Coating Industrial is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,434 in Thai Coating Industrial on September 4, 2024 and sell it today you would earn a total of 316.00 from holding Thai Coating Industrial or generate 12.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.22% |
| Values | Daily Returns |
Pato Chemical Industry vs. Thai Coating Industrial
Performance |
| Timeline |
| Pato Chemical Industry |
| Thai Coating Industrial |
Pato Chemical and Thai Coating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pato Chemical and Thai Coating
The main advantage of trading using opposite Pato Chemical and Thai Coating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pato Chemical position performs unexpectedly, Thai Coating 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 Thai Coating will offset losses from the drop in Thai Coating's long position.The idea behind Pato Chemical Industry and Thai Coating Industrial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Thai Coating vs. Thantawan Industry Public | Thai Coating vs. Thai Packaging Printing | Thai Coating vs. Thai Metal Drum | Thai Coating vs. Thai Film Industries |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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