Correlation Between TCM Public and Thai Metal
Can any of the company-specific risk be diversified away by investing in both TCM Public and Thai Metal 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 Metal 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 Metal Drum, you can compare the effects of market volatilities on TCM Public and Thai Metal 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 Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of TCM Public and Thai Metal.
Diversification Opportunities for TCM Public and Thai Metal
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between TCM and Thai is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding TCM Public and Thai Metal Drum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Metal Drum 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 Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Metal Drum has no effect on the direction of TCM Public i.e., TCM Public and Thai Metal go up and down completely randomly.
Pair Corralation between TCM Public and Thai Metal
Assuming the 90 days trading horizon TCM Public is expected to under-perform the Thai Metal. In addition to that, TCM Public is 2.68 times more volatile than Thai Metal Drum. It trades about -0.31 of its total potential returns per unit of risk. Thai Metal Drum is currently generating about 0.07 per unit of volatility. If you would invest 2,420 in Thai Metal Drum on August 31, 2024 and sell it today you would earn a total of 40.00 from holding Thai Metal Drum or generate 1.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TCM Public vs. Thai Metal Drum
Performance |
| Timeline |
| TCM Public |
| Thai Metal Drum |
TCM Public and Thai Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TCM Public and Thai Metal
The main advantage of trading using opposite TCM Public and Thai Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TCM Public position performs unexpectedly, Thai Metal 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 Metal will offset losses from the drop in Thai Metal'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 Metal vs. Thantawan Industry Public | Thai Metal vs. Thitikorn Public | Thai Metal vs. Siam Steel Service | Thai Metal vs. Thai Vegetable Oil |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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