Correlation Between Ngern Tid and Teka Construction
Can any of the company-specific risk be diversified away by investing in both Ngern Tid and Teka Construction 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 Ngern Tid and Teka Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ngern Tid Lor and Teka Construction PCL, you can compare the effects of market volatilities on Ngern Tid and Teka Construction 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 Ngern Tid with a short position of Teka Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ngern Tid and Teka Construction.
Diversification Opportunities for Ngern Tid and Teka Construction
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ngern and Teka is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Ngern Tid Lor and Teka Construction PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teka Construction PCL and Ngern Tid 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 Ngern Tid Lor are associated (or correlated) with Teka Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teka Construction PCL has no effect on the direction of Ngern Tid i.e., Ngern Tid and Teka Construction go up and down completely randomly.
Pair Corralation between Ngern Tid and Teka Construction
Assuming the 90 days trading horizon Ngern Tid Lor is expected to generate 28.24 times more return on investment than Teka Construction. However, Ngern Tid is 28.24 times more volatile than Teka Construction PCL. It trades about 0.06 of its potential returns per unit of risk. Teka Construction PCL is currently generating about -0.01 per unit of risk. If you would invest 2,132 in Ngern Tid Lor on September 5, 2024 and sell it today you would lose (352.00) from holding Ngern Tid Lor or give up 16.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.58% |
| Values | Daily Returns |
Ngern Tid Lor vs. Teka Construction PCL
Performance |
| Timeline |
| Ngern Tid Lor |
| Teka Construction PCL |
Ngern Tid and Teka Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ngern Tid and Teka Construction
The main advantage of trading using opposite Ngern Tid and Teka Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ngern Tid position performs unexpectedly, Teka Construction 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 Teka Construction will offset losses from the drop in Teka Construction's long position.| Ngern Tid vs. Multibax Public | Ngern Tid vs. Forth Smart Service | Ngern Tid vs. LPN Development Public | Ngern Tid vs. Jasmine International Public |
| Teka Construction vs. TKrungthai Industries Public | Teka Construction vs. TCM Public | Teka Construction vs. Well Graded Engineering | Teka Construction vs. The Steel 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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