Correlation Between Thai Metal and TPI Polene
Can any of the company-specific risk be diversified away by investing in both Thai Metal and TPI Polene 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 TPI Polene 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 TPI Polene Power, you can compare the effects of market volatilities on Thai Metal and TPI Polene 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 TPI Polene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Metal and TPI Polene.
Diversification Opportunities for Thai Metal and TPI Polene
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Thai and TPI is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Thai Metal Drum and TPI Polene Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TPI Polene Power 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 TPI Polene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TPI Polene Power has no effect on the direction of Thai Metal i.e., Thai Metal and TPI Polene go up and down completely randomly.
Pair Corralation between Thai Metal and TPI Polene
Assuming the 90 days trading horizon Thai Metal Drum is expected to generate 79.62 times more return on investment than TPI Polene. However, Thai Metal is 79.62 times more volatile than TPI Polene Power. It trades about 0.06 of its potential returns per unit of risk. TPI Polene Power is currently generating about 0.01 per unit of risk. If you would invest 2,141 in Thai Metal Drum on August 29, 2024 and sell it today you would earn a total of 339.00 from holding Thai Metal Drum or generate 15.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.17% |
| Values | Daily Returns |
Thai Metal Drum vs. TPI Polene Power
Performance |
| Timeline |
| Thai Metal Drum |
| TPI Polene Power |
Thai Metal and TPI Polene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Metal and TPI Polene
The main advantage of trading using opposite Thai Metal and TPI Polene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Metal position performs unexpectedly, TPI Polene 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 TPI Polene will offset losses from the drop in TPI Polene's long position.The idea behind Thai Metal Drum and TPI Polene Power pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| TPI Polene vs. Ratch Group Public | TPI Polene vs. BCPG Public | TPI Polene vs. Gulf Energy Development | TPI Polene vs. BTS Group Holdings |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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