Correlation Between Thai Coating and ALL ENERGY
Can any of the company-specific risk be diversified away by investing in both Thai Coating and ALL ENERGY 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 ALL ENERGY 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 ALL ENERGY UTILITIES, you can compare the effects of market volatilities on Thai Coating and ALL ENERGY 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 ALL ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Coating and ALL ENERGY.
Diversification Opportunities for Thai Coating and ALL ENERGY
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Thai and ALL is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Thai Coating Industrial and ALL ENERGY UTILITIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALL ENERGY UTILITIES 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 ALL ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALL ENERGY UTILITIES has no effect on the direction of Thai Coating i.e., Thai Coating and ALL ENERGY go up and down completely randomly.
Pair Corralation between Thai Coating and ALL ENERGY
Assuming the 90 days trading horizon Thai Coating Industrial is expected to under-perform the ALL ENERGY. But the stock apears to be less risky and, when comparing its historical volatility, Thai Coating Industrial is 1.07 times less risky than ALL ENERGY. The stock trades about -0.13 of its potential returns per unit of risk. The ALL ENERGY UTILITIES is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 19.00 in ALL ENERGY UTILITIES on November 29, 2024 and sell it today you would lose (2.00) from holding ALL ENERGY UTILITIES or give up 10.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Coating Industrial vs. ALL ENERGY UTILITIES
Performance |
| Timeline |
| Thai Coating Industrial |
| ALL ENERGY UTILITIES |
Thai Coating and ALL ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Coating and ALL ENERGY
The main advantage of trading using opposite Thai Coating and ALL ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Coating position performs unexpectedly, ALL ENERGY 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 ALL ENERGY will offset losses from the drop in ALL ENERGY's long position.| Thai Coating vs. Thantawan Industry Public | Thai Coating vs. Thai Packaging Printing | Thai Coating vs. Thai Metal Drum | Thai Coating vs. Thai Film Industries |
| ALL ENERGY vs. Turnkey Communication Services | ALL ENERGY vs. Information and Communication | ALL ENERGY vs. Exotic Food Public | ALL ENERGY vs. TMC Industrial Public |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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