Correlation Between Thaifoods Group and WICE Logistics
Can any of the company-specific risk be diversified away by investing in both Thaifoods Group and WICE Logistics 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 WICE Logistics 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 WICE Logistics PCL, you can compare the effects of market volatilities on Thaifoods Group and WICE Logistics 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 WICE Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thaifoods Group and WICE Logistics.
Diversification Opportunities for Thaifoods Group and WICE Logistics
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Thaifoods and WICE is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Thaifoods Group Public and WICE Logistics PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WICE Logistics PCL 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 WICE Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WICE Logistics PCL has no effect on the direction of Thaifoods Group i.e., Thaifoods Group and WICE Logistics go up and down completely randomly.
Pair Corralation between Thaifoods Group and WICE Logistics
Assuming the 90 days trading horizon Thaifoods Group Public is expected to generate 0.67 times more return on investment than WICE Logistics. However, Thaifoods Group Public is 1.5 times less risky than WICE Logistics. It trades about -0.19 of its potential returns per unit of risk. WICE Logistics PCL is currently generating about -0.27 per unit of risk. If you would invest 434.00 in Thaifoods Group Public on August 25, 2024 and sell it today you would lose (58.00) from holding Thaifoods Group Public or give up 13.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thaifoods Group Public vs. WICE Logistics PCL
Performance |
| Timeline |
| Thaifoods Group Public |
| WICE Logistics PCL |
Thaifoods Group and WICE Logistics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thaifoods Group and WICE Logistics
The main advantage of trading using opposite Thaifoods Group and WICE Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thaifoods Group position performs unexpectedly, WICE Logistics 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 WICE Logistics will offset losses from the drop in WICE Logistics' long position.| Thaifoods Group vs. CP ALL Public | Thaifoods Group vs. Thai Union Group | Thaifoods Group vs. Minor International Public | Thaifoods Group vs. Central Pattana Public |
| WICE Logistics vs. Tata Steel Public | WICE Logistics vs. Thaifoods Group Public | WICE Logistics vs. TMT Steel Public | WICE Logistics 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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