Correlation Between TCM Public and Thai Packaging
Can any of the company-specific risk be diversified away by investing in both TCM Public and Thai Packaging 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 Packaging 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 Packaging Printing, you can compare the effects of market volatilities on TCM Public and Thai Packaging 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 Packaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of TCM Public and Thai Packaging.
Diversification Opportunities for TCM Public and Thai Packaging
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between TCM and Thai is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding TCM Public and Thai Packaging Printing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Packaging Printing 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 Packaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Packaging Printing has no effect on the direction of TCM Public i.e., TCM Public and Thai Packaging go up and down completely randomly.
Pair Corralation between TCM Public and Thai Packaging
Assuming the 90 days trading horizon TCM Public is expected to generate 2.14 times less return on investment than Thai Packaging. But when comparing it to its historical volatility, TCM Public is 1.41 times less risky than Thai Packaging. It trades about 0.04 of its potential returns per unit of risk. Thai Packaging Printing is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,901 in Thai Packaging Printing on September 3, 2024 and sell it today you would lose (671.00) from holding Thai Packaging Printing or give up 35.3% 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 Packaging Printing
Performance |
| Timeline |
| TCM Public |
| Thai Packaging Printing |
TCM Public and Thai Packaging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TCM Public and Thai Packaging
The main advantage of trading using opposite TCM Public and Thai Packaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TCM Public position performs unexpectedly, Thai Packaging 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 Packaging will offset losses from the drop in Thai Packaging'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 |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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