Correlation Between Thantawan Industry and Thai Rung
Can any of the company-specific risk be diversified away by investing in both Thantawan Industry and Thai Rung 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 Thai Rung 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 Thai Rung Union, you can compare the effects of market volatilities on Thantawan Industry and Thai Rung 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 Thai Rung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thantawan Industry and Thai Rung.
Diversification Opportunities for Thantawan Industry and Thai Rung
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Thantawan and Thai is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Thantawan Industry Public and Thai Rung Union in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Rung Union 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 Thai Rung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Rung Union has no effect on the direction of Thantawan Industry i.e., Thantawan Industry and Thai Rung go up and down completely randomly.
Pair Corralation between Thantawan Industry and Thai Rung
Assuming the 90 days trading horizon Thantawan Industry Public is expected to under-perform the Thai Rung. In addition to that, Thantawan Industry is 1.41 times more volatile than Thai Rung Union. It trades about -0.1 of its total potential returns per unit of risk. Thai Rung Union is currently generating about -0.05 per unit of volatility. If you would invest 320.00 in Thai Rung Union on September 3, 2024 and sell it today you would lose (2.00) from holding Thai Rung Union or give up 0.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thantawan Industry Public vs. Thai Rung Union
Performance |
| Timeline |
| Thantawan Industry Public |
| Thai Rung Union |
Thantawan Industry and Thai Rung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thantawan Industry and Thai Rung
The main advantage of trading using opposite Thantawan Industry and Thai Rung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thantawan Industry position performs unexpectedly, Thai Rung 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 Thai Rung will offset losses from the drop in Thai Rung's long position.| Thantawan Industry vs. Thai Metal Drum | Thantawan Industry vs. Haad Thip Public | Thantawan Industry vs. Sahamitr Pressure Container | Thantawan Industry vs. Ratchthani Leasing Public |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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