Correlation Between Thanachart Capital and General Environmental
Can any of the company-specific risk be diversified away by investing in both Thanachart Capital and General Environmental 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 Thanachart Capital and General Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thanachart Capital Public and General Environmental Conservation, you can compare the effects of market volatilities on Thanachart Capital and General Environmental 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 Thanachart Capital with a short position of General Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thanachart Capital and General Environmental.
Diversification Opportunities for Thanachart Capital and General Environmental
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Thanachart and General is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Thanachart Capital Public and General Environmental Conserva in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Environmental and Thanachart Capital 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 Thanachart Capital Public are associated (or correlated) with General Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Environmental has no effect on the direction of Thanachart Capital i.e., Thanachart Capital and General Environmental go up and down completely randomly.
Pair Corralation between Thanachart Capital and General Environmental
Assuming the 90 days trading horizon Thanachart Capital Public is expected to generate 0.35 times more return on investment than General Environmental. However, Thanachart Capital Public is 2.82 times less risky than General Environmental. It trades about 0.08 of its potential returns per unit of risk. General Environmental Conservation is currently generating about -0.09 per unit of risk. If you would invest 4,945 in Thanachart Capital Public on September 5, 2024 and sell it today you would earn a total of 55.00 from holding Thanachart Capital Public or generate 1.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thanachart Capital Public vs. General Environmental Conserva
Performance |
| Timeline |
| Thanachart Capital Public |
| General Environmental |
Thanachart Capital and General Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thanachart Capital and General Environmental
The main advantage of trading using opposite Thanachart Capital and General Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thanachart Capital position performs unexpectedly, General Environmental 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 General Environmental will offset losses from the drop in General Environmental's long position.| Thanachart Capital vs. Kiatnakin Phatra Bank | Thanachart Capital vs. Supalai Public | Thanachart Capital vs. Thai Oil Public | Thanachart Capital vs. The Erawan Group |
| General Environmental vs. Asia Aviation Public | General Environmental vs. Bangkok Dusit Medical | General Environmental vs. Bangkok Expressway and | General Environmental vs. Airports of Thailand |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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