Correlation Between Thaifoods Group and Fine Metal
Can any of the company-specific risk be diversified away by investing in both Thaifoods Group and Fine Metal 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 Fine Metal 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 Fine Metal Technologies, you can compare the effects of market volatilities on Thaifoods Group and Fine Metal 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 Fine Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thaifoods Group and Fine Metal.
Diversification Opportunities for Thaifoods Group and Fine Metal
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Thaifoods and Fine is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Thaifoods Group Public and Fine Metal Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fine Metal Technologies 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 Fine Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fine Metal Technologies has no effect on the direction of Thaifoods Group i.e., Thaifoods Group and Fine Metal go up and down completely randomly.
Pair Corralation between Thaifoods Group and Fine Metal
Assuming the 90 days trading horizon Thaifoods Group Public is expected to under-perform the Fine Metal. But the stock apears to be less risky and, when comparing its historical volatility, Thaifoods Group Public is 24.3 times less risky than Fine Metal. The stock trades about -0.02 of its potential returns per unit of risk. The Fine Metal Technologies is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,664 in Fine Metal Technologies on September 13, 2024 and sell it today you would earn a total of 586.00 from holding Fine Metal Technologies or generate 22.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thaifoods Group Public vs. Fine Metal Technologies
Performance |
| Timeline |
| Thaifoods Group Public |
| Fine Metal Technologies |
Thaifoods Group and Fine Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thaifoods Group and Fine Metal
The main advantage of trading using opposite Thaifoods Group and Fine Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thaifoods Group position performs unexpectedly, Fine Metal 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 Fine Metal will offset losses from the drop in Fine Metal'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 |
| Fine Metal vs. Tata Steel Public | Fine Metal vs. TTCL Public | Fine Metal vs. Thaifoods Group Public | Fine Metal vs. TMT Steel 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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