Correlation Between Thai President and Thai Metal
Can any of the company-specific risk be diversified away by investing in both Thai President 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 President 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 President Foods and Thai Metal Drum, you can compare the effects of market volatilities on Thai President 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 President with a short position of Thai Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai President and Thai Metal.
Diversification Opportunities for Thai President and Thai Metal
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Thai and Thai is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Thai President Foods 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 President 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 President Foods 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 President i.e., Thai President and Thai Metal go up and down completely randomly.
Pair Corralation between Thai President and Thai Metal
Assuming the 90 days trading horizon Thai President Foods is expected to under-perform the Thai Metal. But the stock apears to be less risky and, when comparing its historical volatility, Thai President Foods is 263.99 times less risky than Thai Metal. The stock trades about -0.02 of its potential returns per unit of risk. The Thai Metal Drum is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,440 in Thai Metal Drum on September 1, 2024 and sell it today you would earn a total of 20.00 from holding Thai Metal Drum or generate 0.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Thai President Foods vs. Thai Metal Drum
Performance |
| Timeline |
| Thai President Foods |
| Thai Metal Drum |
Thai President and Thai Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai President and Thai Metal
The main advantage of trading using opposite Thai President and Thai Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai President 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 President vs. MK Restaurant Group | Thai President vs. TRC Construction Public | Thai President vs. Bangkok Expressway and | Thai President vs. Lohakit Metal Public |
| 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| 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 | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |