Correlation Between Thai Film and TCM Public
Can any of the company-specific risk be diversified away by investing in both Thai Film and TCM Public 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 Thai Film and TCM Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thai Film Industries and TCM Public, you can compare the effects of market volatilities on Thai Film and TCM Public 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 Thai Film with a short position of TCM Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Film and TCM Public.
Diversification Opportunities for Thai Film and TCM Public
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Thai and TCM is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Thai Film Industries and TCM Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TCM Public and Thai Film 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 Thai Film Industries are associated (or correlated) with TCM Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TCM Public has no effect on the direction of Thai Film i.e., Thai Film and TCM Public go up and down completely randomly.
Pair Corralation between Thai Film and TCM Public
Assuming the 90 days trading horizon Thai Film Industries is expected to generate 4.05 times more return on investment than TCM Public. However, Thai Film is 4.05 times more volatile than TCM Public. It trades about 0.11 of its potential returns per unit of risk. TCM Public is currently generating about -0.31 per unit of risk. If you would invest 7.00 in Thai Film Industries on August 31, 2024 and sell it today you would earn a total of 1.00 from holding Thai Film Industries or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Film Industries vs. TCM Public
Performance |
| Timeline |
| Thai Film Industries |
| TCM Public |
Thai Film and TCM Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Film and TCM Public
The main advantage of trading using opposite Thai Film and TCM Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Film position performs unexpectedly, TCM Public 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 TCM Public will offset losses from the drop in TCM Public's long position.| Thai Film vs. Thai Reinsurance Public | Thai Film vs. STPI Public | Thai Film vs. Siri Prime Office | Thai Film vs. Thoresen Thai Agencies |
| TCM Public vs. STPI Public | TCM Public vs. Tycoons Worldwide Group | TCM Public vs. Ratchthani Leasing Public | TCM Public vs. Thantawan Industry 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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