Correlation Between Thantawan Industry and Pacific Pipe
Can any of the company-specific risk be diversified away by investing in both Thantawan Industry and Pacific Pipe 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 Pacific Pipe 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 Pacific Pipe Public, you can compare the effects of market volatilities on Thantawan Industry and Pacific Pipe 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 Pacific Pipe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thantawan Industry and Pacific Pipe.
Diversification Opportunities for Thantawan Industry and Pacific Pipe
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Thantawan and Pacific is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Thantawan Industry Public and Pacific Pipe Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Pipe Public 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 Pacific Pipe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Pipe Public has no effect on the direction of Thantawan Industry i.e., Thantawan Industry and Pacific Pipe go up and down completely randomly.
Pair Corralation between Thantawan Industry and Pacific Pipe
Assuming the 90 days trading horizon Thantawan Industry Public is expected to generate 0.36 times more return on investment than Pacific Pipe. However, Thantawan Industry Public is 2.8 times less risky than Pacific Pipe. It trades about -0.05 of its potential returns per unit of risk. Pacific Pipe Public is currently generating about -0.23 per unit of risk. If you would invest 2,925 in Thantawan Industry Public on September 13, 2024 and sell it today you would lose (25.00) from holding Thantawan Industry Public or give up 0.85% 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. Pacific Pipe Public
Performance |
| Timeline |
| Thantawan Industry Public |
| Pacific Pipe Public |
Thantawan Industry and Pacific Pipe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thantawan Industry and Pacific Pipe
The main advantage of trading using opposite Thantawan Industry and Pacific Pipe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thantawan Industry position performs unexpectedly, Pacific Pipe 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 Pacific Pipe will offset losses from the drop in Pacific Pipe's long position.| Thantawan Industry vs. The Erawan Group | Thantawan Industry vs. Jay Mart Public | Thantawan Industry vs. Airports of Thailand | Thantawan Industry vs. Eastern Technical Engineering |
| Pacific Pipe vs. Thantawan Industry Public | Pacific Pipe vs. The Erawan Group | Pacific Pipe vs. Jay Mart Public | Pacific Pipe vs. Airports of Thailand |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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