Correlation Between Thai President and Trinity Watthana
Can any of the company-specific risk be diversified away by investing in both Thai President and Trinity Watthana 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 Trinity Watthana 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 Trinity Watthana Public, you can compare the effects of market volatilities on Thai President and Trinity Watthana 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 Trinity Watthana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai President and Trinity Watthana.
Diversification Opportunities for Thai President and Trinity Watthana
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Thai and Trinity is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Thai President Foods and Trinity Watthana Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trinity Watthana Public 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 Trinity Watthana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trinity Watthana Public has no effect on the direction of Thai President i.e., Thai President and Trinity Watthana go up and down completely randomly.
Pair Corralation between Thai President and Trinity Watthana
Assuming the 90 days trading horizon Thai President Foods is expected to generate 0.15 times more return on investment than Trinity Watthana. However, Thai President Foods is 6.78 times less risky than Trinity Watthana. It trades about -0.05 of its potential returns per unit of risk. Trinity Watthana Public is currently generating about -0.35 per unit of risk. If you would invest 20,000 in Thai President Foods on November 3, 2024 and sell it today you would lose (150.00) from holding Thai President Foods or give up 0.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai President Foods vs. Trinity Watthana Public
Performance |
| Timeline |
| Thai President Foods |
| Trinity Watthana Public |
Thai President and Trinity Watthana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai President and Trinity Watthana
The main advantage of trading using opposite Thai President and Trinity Watthana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai President position performs unexpectedly, Trinity Watthana 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 Trinity Watthana will offset losses from the drop in Trinity Watthana's long position.| Thai President vs. Thai Union Group | Thai President vs. President Bakery Public | Thai President vs. MK Restaurant Group | Thai President vs. Carabao Group Public |
| Trinity Watthana vs. Asia Plus Group | Trinity Watthana vs. Thitikorn Public | Trinity Watthana vs. TISCO Financial Group | Trinity Watthana vs. KGI Securities 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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