Correlation Between TCM Public and STPI Public
Can any of the company-specific risk be diversified away by investing in both TCM Public and STPI Public 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 TCM Public and STPI Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TCM Public and STPI Public, you can compare the effects of market volatilities on TCM Public and STPI Public 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 TCM Public with a short position of STPI Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of TCM Public and STPI Public.
Diversification Opportunities for TCM Public and STPI Public
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between TCM and STPI is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding TCM Public and STPI Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STPI Public and TCM Public 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 TCM Public are associated (or correlated) with STPI Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STPI Public has no effect on the direction of TCM Public i.e., TCM Public and STPI Public go up and down completely randomly.
Pair Corralation between TCM Public and STPI Public
Assuming the 90 days trading horizon TCM Public is expected to generate 1.12 times less return on investment than STPI Public. In addition to that, TCM Public is 1.0 times more volatile than STPI Public. It trades about 0.04 of its total potential returns per unit of risk. STPI Public is currently generating about 0.05 per unit of volatility. If you would invest 368.00 in STPI Public on August 31, 2024 and sell it today you would lose (24.00) from holding STPI Public or give up 6.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
TCM Public vs. STPI Public
Performance |
| Timeline |
| TCM Public |
| STPI Public |
TCM Public and STPI Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TCM Public and STPI Public
The main advantage of trading using opposite TCM Public and STPI Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TCM Public position performs unexpectedly, STPI Public 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 STPI Public will offset losses from the drop in STPI Public's long position.| TCM Public vs. STPI Public | TCM Public vs. Thai Vegetable Oil | TCM Public vs. Tycoons Worldwide Group | TCM Public vs. Ratchthani Leasing Public |
| STPI Public vs. AAPICO Hitech Public | STPI Public vs. AP Public | STPI Public vs. Aikchol Hospital Public | STPI Public vs. Bank of Ayudhya |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |