Correlation Between TMC Industrial and Bangkok Dusit
Can any of the company-specific risk be diversified away by investing in both TMC Industrial and Bangkok Dusit 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 TMC Industrial and Bangkok Dusit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TMC Industrial Public and Bangkok Dusit Medical, you can compare the effects of market volatilities on TMC Industrial and Bangkok Dusit 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 TMC Industrial with a short position of Bangkok Dusit. Check out your portfolio center. Please also check ongoing floating volatility patterns of TMC Industrial and Bangkok Dusit.
Diversification Opportunities for TMC Industrial and Bangkok Dusit
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between TMC and Bangkok is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding TMC Industrial Public and Bangkok Dusit Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangkok Dusit Medical and TMC Industrial 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 TMC Industrial Public are associated (or correlated) with Bangkok Dusit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangkok Dusit Medical has no effect on the direction of TMC Industrial i.e., TMC Industrial and Bangkok Dusit go up and down completely randomly.
Pair Corralation between TMC Industrial and Bangkok Dusit
Assuming the 90 days trading horizon TMC Industrial Public is expected to under-perform the Bangkok Dusit. In addition to that, TMC Industrial is 2.6 times more volatile than Bangkok Dusit Medical. It trades about -0.06 of its total potential returns per unit of risk. Bangkok Dusit Medical is currently generating about -0.02 per unit of volatility. If you would invest 2,697 in Bangkok Dusit Medical on November 27, 2024 and sell it today you would lose (357.00) from holding Bangkok Dusit Medical or give up 13.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
TMC Industrial Public vs. Bangkok Dusit Medical
Performance |
| Timeline |
| TMC Industrial Public |
| Bangkok Dusit Medical |
TMC Industrial and Bangkok Dusit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TMC Industrial and Bangkok Dusit
The main advantage of trading using opposite TMC Industrial and Bangkok Dusit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TMC Industrial position performs unexpectedly, Bangkok Dusit 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 Bangkok Dusit will offset losses from the drop in Bangkok Dusit's long position.| TMC Industrial vs. Thaicom Public | TMC Industrial vs. Home Pottery Public | TMC Industrial vs. TAC Consumer Public | TMC Industrial vs. Thanapiriya 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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