Correlation Between Thaifoods Group and Firetrade Engineering
Can any of the company-specific risk be diversified away by investing in both Thaifoods Group 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 Thaifoods Group and Firetrade Engineering 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 Firetrade Engineering Public, you can compare the effects of market volatilities on Thaifoods Group 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 Thaifoods Group with a short position of Firetrade Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thaifoods Group and Firetrade Engineering.
Diversification Opportunities for Thaifoods Group and Firetrade Engineering
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Thaifoods and Firetrade is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Thaifoods Group Public and Firetrade Engineering Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firetrade Engineering 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 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 Thaifoods Group i.e., Thaifoods Group and Firetrade Engineering go up and down completely randomly.
Pair Corralation between Thaifoods Group and Firetrade Engineering
Assuming the 90 days trading horizon Thaifoods Group is expected to generate 61.39 times less return on investment than Firetrade Engineering. But when comparing it to its historical volatility, Thaifoods Group Public is 31.45 times less risky than Firetrade Engineering. It trades about 0.03 of its potential returns per unit of risk. Firetrade Engineering Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 138.00 in Firetrade Engineering Public on September 14, 2024 and sell it today you would earn a total of 14.00 from holding Firetrade Engineering Public or generate 10.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thaifoods Group Public vs. Firetrade Engineering Public
Performance |
| Timeline |
| Thaifoods Group Public |
| Firetrade Engineering |
Thaifoods Group and Firetrade Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thaifoods Group and Firetrade Engineering
The main advantage of trading using opposite Thaifoods Group and Firetrade Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thaifoods Group 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.| Thaifoods Group vs. GFPT Public | Thaifoods Group vs. Thai Union Group | Thaifoods Group vs. Taokaenoi Food Marketing | Thaifoods Group vs. Com7 PCL |
| Firetrade Engineering vs. Tata Steel Public | Firetrade Engineering vs. TTCL Public | Firetrade Engineering vs. Thaifoods Group Public | Firetrade Engineering 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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