Correlation Between TPI Polene and Thai Metal
Can any of the company-specific risk be diversified away by investing in both TPI Polene and Thai Metal 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 Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TPI Polene Power and Thai Metal Drum, you can compare the effects of market volatilities on TPI Polene and Thai Metal 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 Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of TPI Polene and Thai Metal.
Diversification Opportunities for TPI Polene and Thai Metal
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between TPI and Thai is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding TPI Polene Power and Thai Metal Drum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Metal Drum 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 Power are associated (or correlated) with Thai Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Metal Drum has no effect on the direction of TPI Polene i.e., TPI Polene and Thai Metal go up and down completely randomly.
Pair Corralation between TPI Polene and Thai Metal
Assuming the 90 days trading horizon TPI Polene Power is expected to under-perform the Thai Metal. But the stock apears to be less risky and, when comparing its historical volatility, TPI Polene Power is 106.59 times less risky than Thai Metal. The stock trades about -0.03 of its potential returns per unit of risk. The Thai Metal Drum is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,296 in Thai Metal Drum on September 1, 2024 and sell it today you would earn a total of 164.00 from holding Thai Metal Drum or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TPI Polene Power vs. Thai Metal Drum
Performance |
| Timeline |
| TPI Polene Power |
| Thai Metal Drum |
TPI Polene and Thai Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TPI Polene and Thai Metal
The main advantage of trading using opposite TPI Polene and Thai Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TPI Polene position performs unexpectedly, Thai Metal 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 Metal will offset losses from the drop in Thai Metal's long position.| TPI Polene vs. Ratch Group Public | TPI Polene vs. BCPG Public | TPI Polene vs. Gulf Energy Development | TPI Polene vs. BTS Group Holdings |
| Thai Metal vs. Thantawan Industry Public | Thai Metal vs. Thitikorn Public | Thai Metal vs. Siam Steel Service | Thai Metal vs. Thai Vegetable Oil |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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