Correlation Between Thai German and TKS Technologies
Can any of the company-specific risk be diversified away by investing in both Thai German and TKS Technologies 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 German and TKS Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thai German Products Public and TKS Technologies Public, you can compare the effects of market volatilities on Thai German and TKS Technologies 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 German with a short position of TKS Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai German and TKS Technologies.
Diversification Opportunities for Thai German and TKS Technologies
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Thai and TKS is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Thai German Products Public and TKS Technologies Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TKS Technologies Public and Thai German 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 German Products Public are associated (or correlated) with TKS Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TKS Technologies Public has no effect on the direction of Thai German i.e., Thai German and TKS Technologies go up and down completely randomly.
Pair Corralation between Thai German and TKS Technologies
Assuming the 90 days trading horizon Thai German Products Public is expected to generate 5.92 times more return on investment than TKS Technologies. However, Thai German is 5.92 times more volatile than TKS Technologies Public. It trades about -0.05 of its potential returns per unit of risk. TKS Technologies Public is currently generating about -0.36 per unit of risk. If you would invest 9.00 in Thai German Products Public on November 3, 2024 and sell it today you would lose (1.00) from holding Thai German Products Public or give up 11.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai German Products Public vs. TKS Technologies Public
Performance |
| Timeline |
| Thai German Products |
| TKS Technologies Public |
Thai German and TKS Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai German and TKS Technologies
The main advantage of trading using opposite Thai German and TKS Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai German position performs unexpectedly, TKS Technologies 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 TKS Technologies will offset losses from the drop in TKS Technologies' long position.| Thai German vs. Tipco Foods Public | Thai German vs. Tata Steel Public | Thai German vs. Ratchthani Leasing Public | Thai German vs. Syntec Construction Public |
| TKS Technologies vs. Synnex Public | TKS Technologies vs. SiS Distribution Public | TKS Technologies vs. Thoresen Thai Agencies | TKS Technologies vs. SVI 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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