Correlation Between Thai Nakarin and TRV Rubber
Can any of the company-specific risk be diversified away by investing in both Thai Nakarin and TRV Rubber 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 Nakarin and TRV Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thai Nakarin Hospital and TRV Rubber Products, you can compare the effects of market volatilities on Thai Nakarin and TRV Rubber 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 Nakarin with a short position of TRV Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Nakarin and TRV Rubber.
Diversification Opportunities for Thai Nakarin and TRV Rubber
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Thai and TRV is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Thai Nakarin Hospital and TRV Rubber Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRV Rubber Products and Thai Nakarin 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 Nakarin Hospital are associated (or correlated) with TRV Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRV Rubber Products has no effect on the direction of Thai Nakarin i.e., Thai Nakarin and TRV Rubber go up and down completely randomly.
Pair Corralation between Thai Nakarin and TRV Rubber
Assuming the 90 days trading horizon Thai Nakarin is expected to generate 3.79 times less return on investment than TRV Rubber. But when comparing it to its historical volatility, Thai Nakarin Hospital is 4.54 times less risky than TRV Rubber. It trades about 0.35 of its potential returns per unit of risk. TRV Rubber Products is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 206.00 in TRV Rubber Products on September 4, 2024 and sell it today you would earn a total of 42.00 from holding TRV Rubber Products or generate 20.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Thai Nakarin Hospital vs. TRV Rubber Products
Performance |
| Timeline |
| Thai Nakarin Hospital |
| TRV Rubber Products |
Thai Nakarin and TRV Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Nakarin and TRV Rubber
The main advantage of trading using opposite Thai Nakarin and TRV Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Nakarin position performs unexpectedly, TRV Rubber 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 TRV Rubber will offset losses from the drop in TRV Rubber's long position.| Thai Nakarin vs. Vibhavadi Medical Center | Thai Nakarin vs. Ladprao General Hospital | Thai Nakarin vs. Ekachai Medical Care | Thai Nakarin vs. Chularat Hospital Public |
| TRV Rubber vs. Information and Communication | TRV Rubber vs. Thai Nakarin Hospital | TRV Rubber vs. Advanced Information Technology | TRV Rubber vs. MCS Steel 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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