Correlation Between Thai Metal and Heng Leasing
Can any of the company-specific risk be diversified away by investing in both Thai Metal and Heng Leasing 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 Thai Metal and Heng Leasing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thai Metal Drum and Heng Leasing Capital, you can compare the effects of market volatilities on Thai Metal and Heng Leasing 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 Thai Metal with a short position of Heng Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Metal and Heng Leasing.
Diversification Opportunities for Thai Metal and Heng Leasing
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Thai and Heng is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Thai Metal Drum and Heng Leasing Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heng Leasing Capital and Thai Metal 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 Thai Metal Drum are associated (or correlated) with Heng Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heng Leasing Capital has no effect on the direction of Thai Metal i.e., Thai Metal and Heng Leasing go up and down completely randomly.
Pair Corralation between Thai Metal and Heng Leasing
Assuming the 90 days trading horizon Thai Metal Drum is expected to generate 32.04 times more return on investment than Heng Leasing. However, Thai Metal is 32.04 times more volatile than Heng Leasing Capital. It trades about 0.09 of its potential returns per unit of risk. Heng Leasing Capital is currently generating about -0.05 per unit of risk. If you would invest 2,296 in Thai Metal Drum on September 1, 2024 and sell it today you would earn a total of 164.00 from holding Thai Metal Drum or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Metal Drum vs. Heng Leasing Capital
Performance |
| Timeline |
| Thai Metal Drum |
| Heng Leasing Capital |
Thai Metal and Heng Leasing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Metal and Heng Leasing
The main advantage of trading using opposite Thai Metal and Heng Leasing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Metal position performs unexpectedly, Heng Leasing 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 Heng Leasing will offset losses from the drop in Heng Leasing's long position.| Thai Metal vs. Thantawan Industry Public | Thai Metal vs. Thitikorn Public | Thai Metal vs. Siam Steel Service | Thai Metal vs. Thai Vegetable Oil |
| Heng Leasing vs. Bangkok Commercial Asset | Heng Leasing vs. Siam Global House | Heng Leasing vs. Dohome Public | Heng Leasing vs. JMT Network Services |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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