Correlation Between Stock Exchange and Thai Agro
Can any of the company-specific risk be diversified away by investing in both Stock Exchange and Thai Agro 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 Stock Exchange and Thai Agro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stock Exchange Of and Thai Agro Energy, you can compare the effects of market volatilities on Stock Exchange and Thai Agro 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 Stock Exchange with a short position of Thai Agro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stock Exchange and Thai Agro.
Diversification Opportunities for Stock Exchange and Thai Agro
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Stock and Thai is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Stock Exchange Of and Thai Agro Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Agro Energy and Stock Exchange 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 Stock Exchange Of are associated (or correlated) with Thai Agro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Agro Energy has no effect on the direction of Stock Exchange i.e., Stock Exchange and Thai Agro go up and down completely randomly.
Pair Corralation between Stock Exchange and Thai Agro
Assuming the 90 days trading horizon Stock Exchange Of is expected to generate 0.41 times more return on investment than Thai Agro. However, Stock Exchange Of is 2.46 times less risky than Thai Agro. It trades about -0.46 of its potential returns per unit of risk. Thai Agro Energy is currently generating about -0.46 per unit of risk. If you would invest 134,094 in Stock Exchange Of on November 27, 2024 and sell it today you would lose (10,509) from holding Stock Exchange Of or give up 7.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stock Exchange Of vs. Thai Agro Energy
Performance |
| Timeline |
Stock Exchange and Thai Agro Volatility Contrast
Predicted Return Density |
| Returns |
Stock Exchange Of
Pair trading matchups for Stock Exchange
Thai Agro Energy
Pair trading matchups for Thai Agro
Pair Trading with Stock Exchange and Thai Agro
The main advantage of trading using opposite Stock Exchange and Thai Agro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stock Exchange position performs unexpectedly, Thai Agro 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 Agro will offset losses from the drop in Thai Agro's long position.| Stock Exchange vs. Shangri La Hotel Public | Stock Exchange vs. Siamgas and Petrochemicals | Stock Exchange vs. Turnkey Communication Services | Stock Exchange vs. TRC Construction Public |
| Thai Agro vs. Susco Public | Thai Agro vs. Siamgas and Petrochemicals | Thai Agro vs. TPI Polene Power | Thai Agro vs. TKS Technologies Public |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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