Correlation Between TCM Public and Thai Coating
Can any of the company-specific risk be diversified away by investing in both TCM Public and Thai Coating 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 Thai Coating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TCM Public and Thai Coating Industrial, you can compare the effects of market volatilities on TCM Public and Thai Coating 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 Thai Coating. Check out your portfolio center. Please also check ongoing floating volatility patterns of TCM Public and Thai Coating.
Diversification Opportunities for TCM Public and Thai Coating
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between TCM and Thai is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding TCM Public and Thai Coating Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Coating Industrial 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 Thai Coating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Coating Industrial has no effect on the direction of TCM Public i.e., TCM Public and Thai Coating go up and down completely randomly.
Pair Corralation between TCM Public and Thai Coating
Assuming the 90 days trading horizon TCM Public is expected to generate 25.86 times more return on investment than Thai Coating. However, TCM Public is 25.86 times more volatile than Thai Coating Industrial. It trades about 0.08 of its potential returns per unit of risk. Thai Coating Industrial is currently generating about 0.02 per unit of risk. If you would invest 112.00 in TCM Public on September 12, 2024 and sell it today you would lose (41.00) from holding TCM Public or give up 36.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TCM Public vs. Thai Coating Industrial
Performance |
| Timeline |
| TCM Public |
| Thai Coating Industrial |
TCM Public and Thai Coating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TCM Public and Thai Coating
The main advantage of trading using opposite TCM Public and Thai Coating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TCM Public position performs unexpectedly, Thai Coating 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 Thai Coating will offset losses from the drop in Thai Coating'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 |
| Thai Coating vs. Thantawan Industry Public | Thai Coating vs. The Erawan Group | Thai Coating vs. Jay Mart Public | Thai Coating 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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