Correlation Between TPCS Public and Thai Textile
Can any of the company-specific risk be diversified away by investing in both TPCS Public and Thai Textile 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 TPCS Public and Thai Textile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TPCS Public and Thai Textile Industry, you can compare the effects of market volatilities on TPCS Public and Thai Textile 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 TPCS Public with a short position of Thai Textile. Check out your portfolio center. Please also check ongoing floating volatility patterns of TPCS Public and Thai Textile.
Diversification Opportunities for TPCS Public and Thai Textile
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between TPCS and Thai is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding TPCS Public and Thai Textile Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Textile Industry and TPCS 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 TPCS Public are associated (or correlated) with Thai Textile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Textile Industry has no effect on the direction of TPCS Public i.e., TPCS Public and Thai Textile go up and down completely randomly.
Pair Corralation between TPCS Public and Thai Textile
Assuming the 90 days trading horizon TPCS Public is expected to generate 1.62 times less return on investment than Thai Textile. But when comparing it to its historical volatility, TPCS Public is 3.47 times less risky than Thai Textile. It trades about 0.15 of its potential returns per unit of risk. Thai Textile Industry is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,550 in Thai Textile Industry on October 23, 2024 and sell it today you would earn a total of 125.00 from holding Thai Textile Industry or generate 4.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
TPCS Public vs. Thai Textile Industry
Performance |
| Timeline |
| TPCS Public |
| Thai Textile Industry |
TPCS Public and Thai Textile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TPCS Public and Thai Textile
The main advantage of trading using opposite TPCS Public and Thai Textile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TPCS Public position performs unexpectedly, Thai Textile 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 Textile will offset losses from the drop in Thai Textile's long position.| TPCS Public vs. Thai Textile Industry | TPCS Public vs. Toray Textiles Public | TPCS Public vs. Siam Steel Service | TPCS Public vs. Trinity Watthana Public |
| Thai Textile vs. Thanulux Public | Thai Textile vs. Union Pioneer Public | Thai Textile vs. Thai Rayon Public | Thai Textile 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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