Correlation Between Thanulux Public and United Palm
Can any of the company-specific risk be diversified away by investing in both Thanulux Public and United Palm 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 Thanulux Public and United Palm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thanulux Public and United Palm Oil, you can compare the effects of market volatilities on Thanulux Public and United Palm 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 Thanulux Public with a short position of United Palm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thanulux Public and United Palm.
Diversification Opportunities for Thanulux Public and United Palm
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Thanulux and United is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Thanulux Public and United Palm Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Palm Oil and Thanulux Public 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 Thanulux Public are associated (or correlated) with United Palm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Palm Oil has no effect on the direction of Thanulux Public i.e., Thanulux Public and United Palm go up and down completely randomly.
Pair Corralation between Thanulux Public and United Palm
Assuming the 90 days trading horizon Thanulux Public is expected to generate 1.41 times more return on investment than United Palm. However, Thanulux Public is 1.41 times more volatile than United Palm Oil. It trades about 0.06 of its potential returns per unit of risk. United Palm Oil is currently generating about 0.04 per unit of risk. If you would invest 3,221 in Thanulux Public on September 14, 2024 and sell it today you would earn a total of 379.00 from holding Thanulux Public or generate 11.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thanulux Public vs. United Palm Oil
Performance |
| Timeline |
| Thanulux Public |
| United Palm Oil |
Thanulux Public and United Palm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thanulux Public and United Palm
The main advantage of trading using opposite Thanulux Public and United Palm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thanulux Public position performs unexpectedly, United Palm 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 United Palm will offset losses from the drop in United Palm's long position.| Thanulux Public vs. Hwa Fong Rubber | Thanulux Public vs. AAPICO Hitech Public | Thanulux Public vs. Haad Thip Public | Thanulux Public vs. Italian Thai Development Public |
| United Palm vs. Univanich Palm Oil | United Palm vs. Chumporn Palm Oil | United Palm vs. Lam Soon Public | United Palm vs. United Paper 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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