Correlation Between TISCO Financial and TMBThanachart Bank
Can any of the company-specific risk be diversified away by investing in both TISCO Financial and TMBThanachart Bank 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 TISCO Financial and TMBThanachart Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TISCO Financial Group and TMBThanachart Bank Public, you can compare the effects of market volatilities on TISCO Financial and TMBThanachart Bank 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 TISCO Financial with a short position of TMBThanachart Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of TISCO Financial and TMBThanachart Bank.
Diversification Opportunities for TISCO Financial and TMBThanachart Bank
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between TISCO and TMBThanachart is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding TISCO Financial Group and TMBThanachart Bank Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TMBThanachart Bank Public and TISCO Financial 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 TISCO Financial Group are associated (or correlated) with TMBThanachart Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TMBThanachart Bank Public has no effect on the direction of TISCO Financial i.e., TISCO Financial and TMBThanachart Bank go up and down completely randomly.
Pair Corralation between TISCO Financial and TMBThanachart Bank
Assuming the 90 days trading horizon TISCO Financial is expected to generate 1.27 times less return on investment than TMBThanachart Bank. But when comparing it to its historical volatility, TISCO Financial Group is 2.53 times less risky than TMBThanachart Bank. It trades about 0.06 of its potential returns per unit of risk. TMBThanachart Bank Public is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 181.00 in TMBThanachart Bank Public on October 20, 2024 and sell it today you would earn a total of 1.00 from holding TMBThanachart Bank Public or generate 0.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TISCO Financial Group vs. TMBThanachart Bank Public
Performance |
| Timeline |
| TISCO Financial Group |
| TMBThanachart Bank Public |
TISCO Financial and TMBThanachart Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TISCO Financial and TMBThanachart Bank
The main advantage of trading using opposite TISCO Financial and TMBThanachart Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TISCO Financial position performs unexpectedly, TMBThanachart Bank 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 TMBThanachart Bank will offset losses from the drop in TMBThanachart Bank's long position.| TISCO Financial vs. Kasikornbank Public | TISCO Financial vs. Kiatnakin Phatra Bank | TISCO Financial vs. SCB X Public | TISCO Financial vs. Bangkok Bank Public |
| TMBThanachart Bank vs. The Siam Commercial | TMBThanachart Bank vs. Kasikornbank Public | TMBThanachart Bank vs. Kiatnakin Phatra Bank | TMBThanachart Bank vs. LH Financial Group |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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