Correlation Between Thai Stanley and Lotus Retail
Can any of the company-specific risk be diversified away by investing in both Thai Stanley and Lotus Retail 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 Thai Stanley and Lotus Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thai Stanley Electric and Lotus Retail Growth, you can compare the effects of market volatilities on Thai Stanley and Lotus Retail 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 Thai Stanley with a short position of Lotus Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Stanley and Lotus Retail.
Diversification Opportunities for Thai Stanley and Lotus Retail
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Thai and Lotus is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Thai Stanley Electric and Lotus Retail Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotus Retail Growth and Thai Stanley 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 Thai Stanley Electric are associated (or correlated) with Lotus Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotus Retail Growth has no effect on the direction of Thai Stanley i.e., Thai Stanley and Lotus Retail go up and down completely randomly.
Pair Corralation between Thai Stanley and Lotus Retail
Assuming the 90 days trading horizon Thai Stanley Electric is expected to generate 1.17 times more return on investment than Lotus Retail. However, Thai Stanley is 1.17 times more volatile than Lotus Retail Growth. It trades about 0.03 of its potential returns per unit of risk. Lotus Retail Growth is currently generating about 0.03 per unit of risk. If you would invest 19,776 in Thai Stanley Electric on August 31, 2024 and sell it today you would earn a total of 2,024 from holding Thai Stanley Electric or generate 10.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.35% |
| Values | Daily Returns |
Thai Stanley Electric vs. Lotus Retail Growth
Performance |
| Timeline |
| Thai Stanley Electric |
| Lotus Retail Growth |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Thai Stanley and Lotus Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Stanley and Lotus Retail
The main advantage of trading using opposite Thai Stanley and Lotus Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Stanley position performs unexpectedly, Lotus Retail 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 Lotus Retail will offset losses from the drop in Lotus Retail's long position.| Thai Stanley vs. Somboon Advance Technology | Thai Stanley vs. TISCO Financial Group | Thai Stanley vs. Quality Houses Public | Thai Stanley vs. Hana Microelectronics Public |
| Lotus Retail vs. CPN Retail Growth | Lotus Retail vs. Ticon Freehold and | Lotus Retail vs. WHA Premium Growth | Lotus Retail vs. Major Cineplex Lifestyle |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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