Correlation Between Thai Metal and Thai Packaging
Can any of the company-specific risk be diversified away by investing in both Thai Metal and Thai Packaging 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 Thai Packaging 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 Thai Packaging Printing, you can compare the effects of market volatilities on Thai Metal and Thai Packaging 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 Thai Packaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Metal and Thai Packaging.
Diversification Opportunities for Thai Metal and Thai Packaging
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Thai and Thai is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Thai Metal Drum and Thai Packaging Printing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Packaging Printing 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 Thai Packaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Packaging Printing has no effect on the direction of Thai Metal i.e., Thai Metal and Thai Packaging go up and down completely randomly.
Pair Corralation between Thai Metal and Thai Packaging
Assuming the 90 days trading horizon Thai Metal Drum is expected to generate 1.0 times more return on investment than Thai Packaging. However, Thai Metal is 1.0 times more volatile than Thai Packaging Printing. It trades about 0.06 of its potential returns per unit of risk. Thai Packaging Printing is currently generating about 0.06 per unit of risk. If you would invest 2,149 in Thai Metal Drum on September 3, 2024 and sell it today you would earn a total of 311.00 from holding Thai Metal Drum or generate 14.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.17% |
| Values | Daily Returns |
Thai Metal Drum vs. Thai Packaging Printing
Performance |
| Timeline |
| Thai Metal Drum |
| Thai Packaging Printing |
Thai Metal and Thai Packaging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Metal and Thai Packaging
The main advantage of trading using opposite Thai Metal and Thai Packaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Metal position performs unexpectedly, Thai Packaging 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 Thai Packaging will offset losses from the drop in Thai Packaging'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 |
| Thai Packaging vs. Thai Nam Plastic | Thai Packaging vs. Thantawan Industry Public | Thai Packaging vs. Thai Poly Acrylic | Thai Packaging vs. Thai Rung Union |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |