Correlation Between Thai Stanley and TISCO Financial
Can any of the company-specific risk be diversified away by investing in both Thai Stanley and TISCO Financial 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 TISCO Financial 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 TISCO Financial Group, you can compare the effects of market volatilities on Thai Stanley and TISCO Financial 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 TISCO Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Stanley and TISCO Financial.
Diversification Opportunities for Thai Stanley and TISCO Financial
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Thai and TISCO is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Thai Stanley Electric and TISCO Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TISCO Financial Group 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 TISCO Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TISCO Financial Group has no effect on the direction of Thai Stanley i.e., Thai Stanley and TISCO Financial go up and down completely randomly.
Pair Corralation between Thai Stanley and TISCO Financial
Assuming the 90 days trading horizon Thai Stanley Electric is expected to under-perform the TISCO Financial. In addition to that, Thai Stanley is 1.74 times more volatile than TISCO Financial Group. It trades about -0.08 of its total potential returns per unit of risk. TISCO Financial Group is currently generating about -0.12 per unit of volatility. If you would invest 9,700 in TISCO Financial Group on August 28, 2024 and sell it today you would lose (75.00) from holding TISCO Financial Group or give up 0.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Stanley Electric vs. TISCO Financial Group
Performance |
| Timeline |
| Thai Stanley Electric |
| TISCO Financial Group |
Thai Stanley and TISCO Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Stanley and TISCO Financial
The main advantage of trading using opposite Thai Stanley and TISCO Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Stanley position performs unexpectedly, TISCO Financial 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 TISCO Financial will offset losses from the drop in TISCO Financial's long position.| Thai Stanley vs. SCB X Public | Thai Stanley vs. Kasikornbank Public | Thai Stanley vs. PTT Public | Thai Stanley vs. Kasikornbank Public |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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