Correlation Between Taokaenoi Food and Thonburi Medical
Can any of the company-specific risk be diversified away by investing in both Taokaenoi Food and Thonburi Medical 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 Taokaenoi Food and Thonburi Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taokaenoi Food Marketing and Thonburi Medical Centre, you can compare the effects of market volatilities on Taokaenoi Food and Thonburi Medical 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 Taokaenoi Food with a short position of Thonburi Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taokaenoi Food and Thonburi Medical.
Diversification Opportunities for Taokaenoi Food and Thonburi Medical
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Taokaenoi and Thonburi is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Taokaenoi Food Marketing and Thonburi Medical Centre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thonburi Medical Centre and Taokaenoi Food 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 Taokaenoi Food Marketing are associated (or correlated) with Thonburi Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thonburi Medical Centre has no effect on the direction of Taokaenoi Food i.e., Taokaenoi Food and Thonburi Medical go up and down completely randomly.
Pair Corralation between Taokaenoi Food and Thonburi Medical
Assuming the 90 days trading horizon Taokaenoi Food is expected to generate 1.02 times less return on investment than Thonburi Medical. In addition to that, Taokaenoi Food is 1.0 times more volatile than Thonburi Medical Centre. It trades about 0.04 of its total potential returns per unit of risk. Thonburi Medical Centre is currently generating about 0.04 per unit of volatility. If you would invest 8,978 in Thonburi Medical Centre on September 14, 2024 and sell it today you would earn a total of 472.00 from holding Thonburi Medical Centre or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taokaenoi Food Marketing vs. Thonburi Medical Centre
Performance |
| Timeline |
| Taokaenoi Food Marketing |
| Thonburi Medical Centre |
Taokaenoi Food and Thonburi Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taokaenoi Food and Thonburi Medical
The main advantage of trading using opposite Taokaenoi Food and Thonburi Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taokaenoi Food position performs unexpectedly, Thonburi Medical 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 Thonburi Medical will offset losses from the drop in Thonburi Medical's long position.| Taokaenoi Food vs. CP ALL Public | Taokaenoi Food vs. Carabao Group Public | Taokaenoi Food vs. Thai Union Group | Taokaenoi Food vs. Minor International Public |
| Thonburi Medical vs. Aikchol Hospital Public | Thonburi Medical vs. Nonthavej Hospital Public | Thonburi Medical vs. Wattana Karnpaet Public | Thonburi Medical vs. Mahachai Hospital 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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