Correlation Between Regional Container and Thaifoods Group
Can any of the company-specific risk be diversified away by investing in both Regional Container and Thaifoods Group 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 Regional Container and Thaifoods Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regional Container Lines and Thaifoods Group Public, you can compare the effects of market volatilities on Regional Container and Thaifoods Group 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 Regional Container with a short position of Thaifoods Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regional Container and Thaifoods Group.
Diversification Opportunities for Regional Container and Thaifoods Group
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Regional and Thaifoods is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Regional Container Lines and Thaifoods Group Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thaifoods Group Public and Regional Container 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 Regional Container Lines are associated (or correlated) with Thaifoods Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thaifoods Group Public has no effect on the direction of Regional Container i.e., Regional Container and Thaifoods Group go up and down completely randomly.
Pair Corralation between Regional Container and Thaifoods Group
Assuming the 90 days trading horizon Regional Container Lines is expected to generate 1.48 times more return on investment than Thaifoods Group. However, Regional Container is 1.48 times more volatile than Thaifoods Group Public. It trades about 0.01 of its potential returns per unit of risk. Thaifoods Group Public is currently generating about -0.03 per unit of risk. If you would invest 2,664 in Regional Container Lines on August 27, 2024 and sell it today you would lose (64.00) from holding Regional Container Lines or give up 2.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regional Container Lines vs. Thaifoods Group Public
Performance |
| Timeline |
| Regional Container Lines |
| Thaifoods Group Public |
Regional Container and Thaifoods Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regional Container and Thaifoods Group
The main advantage of trading using opposite Regional Container and Thaifoods Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regional Container position performs unexpectedly, Thaifoods Group 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 Thaifoods Group will offset losses from the drop in Thaifoods Group's long position.| Regional Container vs. Tata Steel Public | Regional Container vs. Thaifoods Group Public | Regional Container vs. TMT Steel Public | Regional Container vs. The Erawan Group |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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