Correlation Between Thai Coating and 2S Metal
Can any of the company-specific risk be diversified away by investing in both Thai Coating and 2S 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 Thai Coating and 2S Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thai Coating Industrial and 2S Metal Public, you can compare the effects of market volatilities on Thai Coating and 2S 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 Thai Coating with a short position of 2S Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Coating and 2S Metal.
Diversification Opportunities for Thai Coating and 2S Metal
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Thai and 2S Metal is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Thai Coating Industrial and 2S Metal Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 2S Metal Public and Thai Coating 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 Coating Industrial are associated (or correlated) with 2S Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 2S Metal Public has no effect on the direction of Thai Coating i.e., Thai Coating and 2S Metal go up and down completely randomly.
Pair Corralation between Thai Coating and 2S Metal
Assuming the 90 days trading horizon Thai Coating Industrial is expected to generate 5.1 times more return on investment than 2S Metal. However, Thai Coating is 5.1 times more volatile than 2S Metal Public. It trades about 0.07 of its potential returns per unit of risk. 2S Metal Public is currently generating about -0.16 per unit of risk. If you would invest 2,600 in Thai Coating Industrial on August 31, 2024 and sell it today you would earn a total of 150.00 from holding Thai Coating Industrial or generate 5.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Coating Industrial vs. 2S Metal Public
Performance |
| Timeline |
| Thai Coating Industrial |
| 2S Metal Public |
Thai Coating and 2S Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Coating and 2S Metal
The main advantage of trading using opposite Thai Coating and 2S Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Coating position performs unexpectedly, 2S 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 2S Metal will offset losses from the drop in 2S Metal's long position.| Thai Coating vs. AAPICO Hitech Public | Thai Coating vs. AP Public | Thai Coating vs. Aikchol Hospital Public | Thai Coating vs. Bank of Ayudhya |
| 2S Metal vs. Diamond Building Products | 2S Metal vs. MCS Steel Public | 2S Metal vs. Asia Green Energy | 2S Metal vs. Hwa Fong Rubber |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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