Correlation Between Thai Coating and Itthirit Nice
Can any of the company-specific risk be diversified away by investing in both Thai Coating and Itthirit Nice 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 Itthirit Nice 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 Itthirit Nice Corp, you can compare the effects of market volatilities on Thai Coating and Itthirit Nice 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 Itthirit Nice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Coating and Itthirit Nice.
Diversification Opportunities for Thai Coating and Itthirit Nice
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Thai and Itthirit is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Thai Coating Industrial and Itthirit Nice Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itthirit Nice Corp 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 Itthirit Nice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itthirit Nice Corp has no effect on the direction of Thai Coating i.e., Thai Coating and Itthirit Nice go up and down completely randomly.
Pair Corralation between Thai Coating and Itthirit Nice
Assuming the 90 days trading horizon Thai Coating is expected to generate 38.29 times less return on investment than Itthirit Nice. But when comparing it to its historical volatility, Thai Coating Industrial is 15.17 times less risky than Itthirit Nice. It trades about 0.02 of its potential returns per unit of risk. Itthirit Nice Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 306.00 in Itthirit Nice Corp on September 20, 2024 and sell it today you would lose (137.00) from holding Itthirit Nice Corp or give up 44.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 88.52% |
| Values | Daily Returns |
Thai Coating Industrial vs. Itthirit Nice Corp
Performance |
| Timeline |
| Thai Coating Industrial |
| Itthirit Nice Corp |
Thai Coating and Itthirit Nice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Coating and Itthirit Nice
The main advantage of trading using opposite Thai Coating and Itthirit Nice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Coating position performs unexpectedly, Itthirit Nice 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 Itthirit Nice will offset losses from the drop in Itthirit Nice'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 |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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