Correlation Between Thai Capital and Thaifoods Group
Can any of the company-specific risk be diversified away by investing in both Thai Capital and Thaifoods Group 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 Capital and Thaifoods Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thai Capital and Thaifoods Group Public, you can compare the effects of market volatilities on Thai Capital and Thaifoods Group 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 Capital with a short position of Thaifoods Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Capital and Thaifoods Group.
Diversification Opportunities for Thai Capital and Thaifoods Group
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Thai and Thaifoods is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Thai Capital and Thaifoods Group Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thaifoods Group Public and Thai 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 Thai Capital are associated (or correlated) with Thaifoods Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thaifoods Group Public has no effect on the direction of Thai Capital i.e., Thai Capital and Thaifoods Group go up and down completely randomly.
Pair Corralation between Thai Capital and Thaifoods Group
Assuming the 90 days trading horizon Thai Capital is expected to generate 2.08 times less return on investment than Thaifoods Group. But when comparing it to its historical volatility, Thai Capital is 1.41 times less risky than Thaifoods Group. It trades about 0.05 of its potential returns per unit of risk. Thaifoods Group Public is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 407.00 in Thaifoods Group Public on November 8, 2024 and sell it today you would lose (79.00) from holding Thaifoods Group Public or give up 19.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.59% |
| Values | Daily Returns |
Thai Capital vs. Thaifoods Group Public
Performance |
| Timeline |
| Thai Capital |
| Thaifoods Group Public |
Thai Capital and Thaifoods Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Capital and Thaifoods Group
The main advantage of trading using opposite Thai Capital and Thaifoods Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Capital position performs unexpectedly, Thaifoods Group 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 Thaifoods Group will offset losses from the drop in Thaifoods Group's long position.| Thai Capital vs. RPCG Public | Thai Capital vs. Solartron Public | Thai Capital vs. Star Petroleum Refining | Thai Capital vs. Super Energy |
| Thaifoods Group vs. Thaifoods Group Public | Thaifoods Group vs. Thai President Foods | Thaifoods Group vs. Thai Capital |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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