Correlation Between Thantawan Industry and Chonburi Concrete
Can any of the company-specific risk be diversified away by investing in both Thantawan Industry and Chonburi Concrete 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 Thantawan Industry and Chonburi Concrete into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thantawan Industry Public and Chonburi Concrete Product, you can compare the effects of market volatilities on Thantawan Industry and Chonburi Concrete 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 Thantawan Industry with a short position of Chonburi Concrete. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thantawan Industry and Chonburi Concrete.
Diversification Opportunities for Thantawan Industry and Chonburi Concrete
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Thantawan and Chonburi is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Thantawan Industry Public and Chonburi Concrete Product in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chonburi Concrete Product and Thantawan Industry 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 Thantawan Industry Public are associated (or correlated) with Chonburi Concrete. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chonburi Concrete Product has no effect on the direction of Thantawan Industry i.e., Thantawan Industry and Chonburi Concrete go up and down completely randomly.
Pair Corralation between Thantawan Industry and Chonburi Concrete
Assuming the 90 days trading horizon Thantawan Industry Public is expected to generate 0.41 times more return on investment than Chonburi Concrete. However, Thantawan Industry Public is 2.46 times less risky than Chonburi Concrete. It trades about -0.41 of its potential returns per unit of risk. Chonburi Concrete Product is currently generating about -0.19 per unit of risk. If you would invest 2,825 in Thantawan Industry Public on October 21, 2024 and sell it today you would lose (250.00) from holding Thantawan Industry Public or give up 8.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thantawan Industry Public vs. Chonburi Concrete Product
Performance |
| Timeline |
| Thantawan Industry Public |
| Chonburi Concrete Product |
Thantawan Industry and Chonburi Concrete Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thantawan Industry and Chonburi Concrete
The main advantage of trading using opposite Thantawan Industry and Chonburi Concrete positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thantawan Industry position performs unexpectedly, Chonburi Concrete 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 Chonburi Concrete will offset losses from the drop in Chonburi Concrete's long position.| Thantawan Industry vs. Asia Metal Public | Thantawan Industry vs. Chonburi Concrete Product | Thantawan Industry vs. Asia Plus Group | Thantawan Industry vs. CSP Steel Center |
| Chonburi Concrete vs. Asia Metal Public | Chonburi Concrete vs. Asia Plus Group | Chonburi Concrete vs. CSP Steel Center | Chonburi Concrete vs. Capital Engineering Network |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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