Correlation Between Thaifoods Group and Gunkul Engineering
Can any of the company-specific risk be diversified away by investing in both Thaifoods Group and Gunkul 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 Gunkul 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 Gunkul Engineering Public, you can compare the effects of market volatilities on Thaifoods Group and Gunkul 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 Gunkul Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thaifoods Group and Gunkul Engineering.
Diversification Opportunities for Thaifoods Group and Gunkul Engineering
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Thaifoods and Gunkul is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Thaifoods Group Public and Gunkul Engineering Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gunkul Engineering 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 Gunkul Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gunkul Engineering Public has no effect on the direction of Thaifoods Group i.e., Thaifoods Group and Gunkul Engineering go up and down completely randomly.
Pair Corralation between Thaifoods Group and Gunkul Engineering
Assuming the 90 days trading horizon Thaifoods Group Public is expected to generate 0.61 times more return on investment than Gunkul Engineering. However, Thaifoods Group Public is 1.63 times less risky than Gunkul Engineering. It trades about -0.37 of its potential returns per unit of risk. Gunkul Engineering Public is currently generating about -0.38 per unit of risk. If you would invest 416.00 in Thaifoods Group Public on August 24, 2024 and sell it today you would lose (40.00) from holding Thaifoods Group Public or give up 9.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thaifoods Group Public vs. Gunkul Engineering Public
Performance |
| Timeline |
| Thaifoods Group Public |
| Gunkul Engineering Public |
Thaifoods Group and Gunkul Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thaifoods Group and Gunkul Engineering
The main advantage of trading using opposite Thaifoods Group and Gunkul Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thaifoods Group position performs unexpectedly, Gunkul 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 Gunkul Engineering will offset losses from the drop in Gunkul Engineering's long position.| Thaifoods Group vs. CP ALL Public | Thaifoods Group vs. Carabao Group Public | Thaifoods Group vs. Thai Union Group | Thaifoods Group vs. Minor International Public |
| Gunkul Engineering vs. Tata Steel Public | Gunkul Engineering vs. Thaifoods Group Public | Gunkul Engineering vs. TMT Steel Public | Gunkul Engineering vs. The Erawan Group |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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