Correlation Between Thai Coating and Pato Chemical
Can any of the company-specific risk be diversified away by investing in both Thai Coating and Pato Chemical 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 Pato Chemical 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 Pato Chemical Industry, you can compare the effects of market volatilities on Thai Coating and Pato Chemical 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 Pato Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Coating and Pato Chemical.
Diversification Opportunities for Thai Coating and Pato Chemical
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Thai and Pato is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Thai Coating Industrial and Pato Chemical Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pato Chemical Industry 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 Pato Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pato Chemical Industry has no effect on the direction of Thai Coating i.e., Thai Coating and Pato Chemical go up and down completely randomly.
Pair Corralation between Thai Coating and Pato Chemical
Assuming the 90 days trading horizon Thai Coating Industrial is expected to generate 17.04 times more return on investment than Pato Chemical. However, Thai Coating is 17.04 times more volatile than Pato Chemical Industry. It trades about 0.12 of its potential returns per unit of risk. Pato Chemical Industry is currently generating about -0.35 per unit of risk. If you would invest 2,400 in Thai Coating Industrial on September 2, 2024 and sell it today you would earn a total of 350.00 from holding Thai Coating Industrial or generate 14.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Thai Coating Industrial vs. Pato Chemical Industry
Performance |
| Timeline |
| Thai Coating Industrial |
| Pato Chemical Industry |
Thai Coating and Pato Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Coating and Pato Chemical
The main advantage of trading using opposite Thai Coating and Pato Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Coating position performs unexpectedly, Pato Chemical 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 Pato Chemical will offset losses from the drop in Pato Chemical'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 |
| Pato Chemical vs. AAPICO Hitech Public | Pato Chemical vs. AP Public | Pato Chemical vs. Aikchol Hospital Public | Pato Chemical vs. Bank of Ayudhya |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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