Correlation Between Thaifoods Group and Demco Public
Can any of the company-specific risk be diversified away by investing in both Thaifoods Group and Demco Public 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 Thaifoods Group and Demco Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thaifoods Group Public and Demco Public, you can compare the effects of market volatilities on Thaifoods Group and Demco Public 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 Thaifoods Group with a short position of Demco Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thaifoods Group and Demco Public.
Diversification Opportunities for Thaifoods Group and Demco Public
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Thaifoods and Demco is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Thaifoods Group Public and Demco Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Demco Public and Thaifoods Group 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 Thaifoods Group Public are associated (or correlated) with Demco Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Demco Public has no effect on the direction of Thaifoods Group i.e., Thaifoods Group and Demco Public go up and down completely randomly.
Pair Corralation between Thaifoods Group and Demco Public
Assuming the 90 days trading horizon Thaifoods Group Public is expected to under-perform the Demco Public. But the stock apears to be less risky and, when comparing its historical volatility, Thaifoods Group Public is 1.9 times less risky than Demco Public. The stock trades about -0.34 of its potential returns per unit of risk. The Demco Public is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 340.00 in Demco Public on August 30, 2024 and sell it today you would earn a total of 2.00 from holding Demco Public or generate 0.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Thaifoods Group Public vs. Demco Public
Performance |
| Timeline |
| Thaifoods Group Public |
| Demco Public |
Thaifoods Group and Demco Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thaifoods Group and Demco Public
The main advantage of trading using opposite Thaifoods Group and Demco Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thaifoods Group position performs unexpectedly, Demco Public 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 Demco Public will offset losses from the drop in Demco Public's long position.| Thaifoods Group vs. GFPT Public | Thaifoods Group vs. Thai Union Group | Thaifoods Group vs. Taokaenoi Food Marketing | Thaifoods Group vs. Com7 PCL |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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