Correlation Between Thaifoods Group and Lohakit Metal
Can any of the company-specific risk be diversified away by investing in both Thaifoods Group and Lohakit 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 Lohakit 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 Lohakit Metal Public, you can compare the effects of market volatilities on Thaifoods Group and Lohakit 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 Lohakit Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thaifoods Group and Lohakit Metal.
Diversification Opportunities for Thaifoods Group and Lohakit Metal
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Thaifoods and Lohakit is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Thaifoods Group Public and Lohakit Metal Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lohakit Metal 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 Lohakit Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lohakit Metal Public has no effect on the direction of Thaifoods Group i.e., Thaifoods Group and Lohakit Metal go up and down completely randomly.
Pair Corralation between Thaifoods Group and Lohakit Metal
Assuming the 90 days trading horizon Thaifoods Group Public is expected to under-perform the Lohakit Metal. In addition to that, Thaifoods Group is 1.93 times more volatile than Lohakit Metal Public. It trades about -0.29 of its total potential returns per unit of risk. Lohakit Metal Public is currently generating about 0.04 per unit of volatility. If you would invest 370.00 in Lohakit Metal Public on September 13, 2024 and sell it today you would earn a total of 2.00 from holding Lohakit Metal Public or generate 0.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thaifoods Group Public vs. Lohakit Metal Public
Performance |
| Timeline |
| Thaifoods Group Public |
| Lohakit Metal Public |
Thaifoods Group and Lohakit Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thaifoods Group and Lohakit Metal
The main advantage of trading using opposite Thaifoods Group and Lohakit Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thaifoods Group position performs unexpectedly, Lohakit 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 Lohakit Metal will offset losses from the drop in Lohakit 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 |
| Lohakit Metal vs. Tata Steel Public | Lohakit Metal vs. TTCL Public | Lohakit Metal vs. Thaifoods Group Public | Lohakit 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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