Correlation Between Thai Group and TEAM Consulting
Can any of the company-specific risk be diversified away by investing in both Thai Group and TEAM Consulting 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 Group and TEAM Consulting into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thai Group Holdings and TEAM Consulting Engineering, you can compare the effects of market volatilities on Thai Group and TEAM Consulting 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 Group with a short position of TEAM Consulting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Group and TEAM Consulting.
Diversification Opportunities for Thai Group and TEAM Consulting
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Thai and TEAM is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Thai Group Holdings and TEAM Consulting Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TEAM Consulting Engi and Thai 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 Thai Group Holdings are associated (or correlated) with TEAM Consulting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TEAM Consulting Engi has no effect on the direction of Thai Group i.e., Thai Group and TEAM Consulting go up and down completely randomly.
Pair Corralation between Thai Group and TEAM Consulting
Assuming the 90 days trading horizon Thai Group Holdings is expected to generate 54.87 times more return on investment than TEAM Consulting. However, Thai Group is 54.87 times more volatile than TEAM Consulting Engineering. It trades about 0.12 of its potential returns per unit of risk. TEAM Consulting Engineering is currently generating about -0.28 per unit of risk. If you would invest 0.00 in Thai Group Holdings on September 3, 2024 and sell it today you would earn a total of 1,220 from holding Thai Group Holdings or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Group Holdings vs. TEAM Consulting Engineering
Performance |
| Timeline |
| Thai Group Holdings |
| TEAM Consulting Engi |
Thai Group and TEAM Consulting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Group and TEAM Consulting
The main advantage of trading using opposite Thai Group and TEAM Consulting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Group position performs unexpectedly, TEAM Consulting 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 TEAM Consulting will offset losses from the drop in TEAM Consulting's long position.| Thai Group vs. Ratchthani Leasing Public | Thai Group vs. TEAM Consulting Engineering | Thai Group vs. Thai President Foods | Thai Group vs. Thai Reinsurance Public |
| TEAM Consulting vs. Taokaenoi Food Marketing | TEAM Consulting vs. Tipco Asphalt Public | TEAM Consulting vs. Ratchthani Leasing Public | TEAM Consulting 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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