Correlation Between Thaifoods Group and Regional Container
Can any of the company-specific risk be diversified away by investing in both Thaifoods Group and Regional Container 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 Regional Container 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 Regional Container Lines, you can compare the effects of market volatilities on Thaifoods Group and Regional Container 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 Regional Container. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thaifoods Group and Regional Container.
Diversification Opportunities for Thaifoods Group and Regional Container
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Thaifoods and Regional is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Thaifoods Group Public and Regional Container Lines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regional Container Lines 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 Regional Container. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regional Container Lines has no effect on the direction of Thaifoods Group i.e., Thaifoods Group and Regional Container go up and down completely randomly.
Pair Corralation between Thaifoods Group and Regional Container
Assuming the 90 days trading horizon Thaifoods Group is expected to generate 19.5 times less return on investment than Regional Container. But when comparing it to its historical volatility, Thaifoods Group Public is 1.57 times less risky than Regional Container. It trades about 0.0 of its potential returns per unit of risk. Regional Container Lines is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,243 in Regional Container Lines on August 28, 2024 and sell it today you would earn a total of 332.00 from holding Regional Container Lines or generate 14.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.71% |
| Values | Daily Returns |
Thaifoods Group Public vs. Regional Container Lines
Performance |
| Timeline |
| Thaifoods Group Public |
| Regional Container Lines |
Thaifoods Group and Regional Container Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thaifoods Group and Regional Container
The main advantage of trading using opposite Thaifoods Group and Regional Container positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thaifoods Group position performs unexpectedly, Regional Container 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 Regional Container will offset losses from the drop in Regional Container's long position.The idea behind Thaifoods Group Public and Regional Container Lines pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Regional Container vs. Tata Steel Public | Regional Container vs. Thaifoods Group Public | Regional Container vs. TMT Steel Public | Regional Container 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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