Correlation Between Thai Film and Thai Metal
Can any of the company-specific risk be diversified away by investing in both Thai Film and Thai 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 Thai Film and Thai Metal 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 Thai Metal Drum, you can compare the effects of market volatilities on Thai Film and Thai 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 Thai Film with a short position of Thai Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Film and Thai Metal.
Diversification Opportunities for Thai Film and Thai Metal
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Thai and Thai is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Thai Film Industries and Thai Metal Drum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Metal Drum 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 Thai Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Metal Drum has no effect on the direction of Thai Film i.e., Thai Film and Thai Metal go up and down completely randomly.
Pair Corralation between Thai Film and Thai Metal
Assuming the 90 days trading horizon Thai Film Industries is expected to generate 10.87 times more return on investment than Thai Metal. However, Thai Film is 10.87 times more volatile than Thai Metal Drum. It trades about 0.11 of its potential returns per unit of risk. Thai Metal Drum is currently generating about 0.07 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Film Industries vs. Thai Metal Drum
Performance |
| Timeline |
| Thai Film Industries |
| Thai Metal Drum |
Thai Film and Thai Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Film and Thai Metal
The main advantage of trading using opposite Thai Film and Thai Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Film position performs unexpectedly, Thai 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 Thai Metal will offset losses from the drop in Thai Metal'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 |
| Thai Metal vs. Thantawan Industry Public | Thai Metal vs. Thitikorn Public | Thai Metal vs. Siam Steel Service | Thai Metal vs. Thai Vegetable Oil |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |