Correlation Between Thantawan Industry and Pato Chemical
Can any of the company-specific risk be diversified away by investing in both Thantawan Industry and Pato Chemical 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 Pato Chemical 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 Pato Chemical Industry, you can compare the effects of market volatilities on Thantawan Industry and Pato Chemical 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 Pato Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thantawan Industry and Pato Chemical.
Diversification Opportunities for Thantawan Industry and Pato Chemical
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Thantawan and Pato is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Thantawan Industry Public and Pato Chemical Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pato Chemical Industry 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 Pato Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pato Chemical Industry has no effect on the direction of Thantawan Industry i.e., Thantawan Industry and Pato Chemical go up and down completely randomly.
Pair Corralation between Thantawan Industry and Pato Chemical
Assuming the 90 days trading horizon Thantawan Industry Public is expected to generate 1.33 times more return on investment than Pato Chemical. However, Thantawan Industry is 1.33 times more volatile than Pato Chemical Industry. It trades about 0.04 of its potential returns per unit of risk. Pato Chemical Industry is currently generating about -0.03 per unit of risk. If you would invest 2,490 in Thantawan Industry Public on September 12, 2024 and sell it today you would earn a total of 385.00 from holding Thantawan Industry Public or generate 15.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.95% |
| Values | Daily Returns |
Thantawan Industry Public vs. Pato Chemical Industry
Performance |
| Timeline |
| Thantawan Industry Public |
| Pato Chemical Industry |
Thantawan Industry and Pato Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thantawan Industry and Pato Chemical
The main advantage of trading using opposite Thantawan Industry and Pato Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thantawan Industry position performs unexpectedly, Pato Chemical 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 Pato Chemical will offset losses from the drop in Pato Chemical'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 |
| Pato Chemical vs. Thantawan Industry Public | Pato Chemical vs. The Erawan Group | Pato Chemical vs. Jay Mart Public | Pato Chemical 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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