Correlation Between Thanachart Capital and TISCO Financial
Can any of the company-specific risk be diversified away by investing in both Thanachart Capital 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 Thanachart Capital and TISCO Financial 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 TISCO Financial Group, you can compare the effects of market volatilities on Thanachart Capital 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 Thanachart Capital with a short position of TISCO Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thanachart Capital and TISCO Financial.
Diversification Opportunities for Thanachart Capital and TISCO Financial
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Thanachart and TISCO is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Thanachart Capital Public 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 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 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 Thanachart Capital i.e., Thanachart Capital and TISCO Financial go up and down completely randomly.
Pair Corralation between Thanachart Capital and TISCO Financial
Assuming the 90 days trading horizon Thanachart Capital Public is expected to under-perform the TISCO Financial. In addition to that, Thanachart Capital is 4.09 times more volatile than TISCO Financial Group. It trades about -0.27 of its total potential returns per unit of risk. TISCO Financial Group is currently generating about 0.0 per unit of volatility. If you would invest 9,650 in TISCO Financial Group on September 1, 2024 and sell it today you would earn a total of 0.00 from holding TISCO Financial Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thanachart Capital Public vs. TISCO Financial Group
Performance |
| Timeline |
| Thanachart Capital Public |
| TISCO Financial Group |
Thanachart Capital and TISCO Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thanachart Capital and TISCO Financial
The main advantage of trading using opposite Thanachart Capital and TISCO Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thanachart Capital 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.The idea behind Thanachart Capital Public and TISCO Financial Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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