Correlation Between Thai Coating and Firetrade Engineering
Can any of the company-specific risk be diversified away by investing in both Thai Coating and Firetrade Engineering 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 Firetrade Engineering 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 Firetrade Engineering Public, you can compare the effects of market volatilities on Thai Coating and Firetrade Engineering 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 Firetrade Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Coating and Firetrade Engineering.
Diversification Opportunities for Thai Coating and Firetrade Engineering
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Thai and Firetrade is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Thai Coating Industrial and Firetrade Engineering Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firetrade Engineering 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 Firetrade Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firetrade Engineering has no effect on the direction of Thai Coating i.e., Thai Coating and Firetrade Engineering go up and down completely randomly.
Pair Corralation between Thai Coating and Firetrade Engineering
Assuming the 90 days trading horizon Thai Coating Industrial is expected to under-perform the Firetrade Engineering. In addition to that, Thai Coating is 5.51 times more volatile than Firetrade Engineering Public. It trades about -0.13 of its total potential returns per unit of risk. Firetrade Engineering Public is currently generating about 0.05 per unit of volatility. If you would invest 149.00 in Firetrade Engineering Public on October 21, 2024 and sell it today you would earn a total of 1.00 from holding Firetrade Engineering Public or generate 0.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Thai Coating Industrial vs. Firetrade Engineering Public
Performance |
| Timeline |
| Thai Coating Industrial |
| Firetrade Engineering |
Thai Coating and Firetrade Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Coating and Firetrade Engineering
The main advantage of trading using opposite Thai Coating and Firetrade Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Coating position performs unexpectedly, Firetrade Engineering 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 Firetrade Engineering will offset losses from the drop in Firetrade Engineering's long position.| Thai Coating vs. Asia Metal Public | Thai Coating vs. Chonburi Concrete Product | Thai Coating vs. Asia Plus Group | Thai Coating vs. CSP Steel Center |
| Firetrade Engineering vs. Communication System Solution | Firetrade Engineering vs. Forth Public | Firetrade Engineering vs. Karmarts Public | Firetrade Engineering vs. Global Connections 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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