Correlation Between TPI Polene and Thai Solar
Can any of the company-specific risk be diversified away by investing in both TPI Polene and Thai Solar 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 TPI Polene and Thai Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TPI Polene Public and Thai Solar Energy, you can compare the effects of market volatilities on TPI Polene and Thai Solar 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 TPI Polene with a short position of Thai Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of TPI Polene and Thai Solar.
Diversification Opportunities for TPI Polene and Thai Solar
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between TPI and Thai is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding TPI Polene Public and Thai Solar Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Solar Energy and TPI Polene 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 TPI Polene Public are associated (or correlated) with Thai Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Solar Energy has no effect on the direction of TPI Polene i.e., TPI Polene and Thai Solar go up and down completely randomly.
Pair Corralation between TPI Polene and Thai Solar
Assuming the 90 days trading horizon TPI Polene Public is expected to under-perform the Thai Solar. But the stock apears to be less risky and, when comparing its historical volatility, TPI Polene Public is 37.36 times less risky than Thai Solar. The stock trades about -0.06 of its potential returns per unit of risk. The Thai Solar Energy is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 207.00 in Thai Solar Energy on December 4, 2024 and sell it today you would lose (168.00) from holding Thai Solar Energy or give up 81.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
TPI Polene Public vs. Thai Solar Energy
Performance |
| Timeline |
| TPI Polene Public |
| Thai Solar Energy |
TPI Polene and Thai Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TPI Polene and Thai Solar
The main advantage of trading using opposite TPI Polene and Thai Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TPI Polene position performs unexpectedly, Thai Solar 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 Solar will offset losses from the drop in Thai Solar's long position.| TPI Polene vs. True Public | TPI Polene vs. IRPC Public | TPI Polene vs. Banpu Public | TPI Polene vs. Thai Oil Public |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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