Correlation Between Thai Packaging and TCM Public
Can any of the company-specific risk be diversified away by investing in both Thai Packaging and TCM Public 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 Packaging and TCM Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thai Packaging Printing and TCM Public, you can compare the effects of market volatilities on Thai Packaging and TCM Public 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 Packaging with a short position of TCM Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Packaging and TCM Public.
Diversification Opportunities for Thai Packaging and TCM Public
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Thai and TCM is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Thai Packaging Printing and TCM Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TCM Public and Thai Packaging 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 Packaging Printing are associated (or correlated) with TCM Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TCM Public has no effect on the direction of Thai Packaging i.e., Thai Packaging and TCM Public go up and down completely randomly.
Pair Corralation between Thai Packaging and TCM Public
Assuming the 90 days trading horizon Thai Packaging Printing is expected to generate 1.41 times more return on investment than TCM Public. However, Thai Packaging is 1.41 times more volatile than TCM Public. It trades about 0.06 of its potential returns per unit of risk. TCM Public is currently generating about 0.04 per unit of risk. If you would invest 1,901 in Thai Packaging Printing on September 3, 2024 and sell it today you would lose (671.00) from holding Thai Packaging Printing or give up 35.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Packaging Printing vs. TCM Public
Performance |
| Timeline |
| Thai Packaging Printing |
| TCM Public |
Thai Packaging and TCM Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Packaging and TCM Public
The main advantage of trading using opposite Thai Packaging and TCM Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Packaging position performs unexpectedly, TCM Public 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 TCM Public will offset losses from the drop in TCM Public's long position.| Thai Packaging vs. Thai Nam Plastic | Thai Packaging vs. Thantawan Industry Public | Thai Packaging vs. Thai Poly Acrylic | Thai Packaging vs. Thai Rung Union |
| TCM Public vs. STPI Public | TCM Public vs. Thai Vegetable Oil | TCM Public vs. Tycoons Worldwide Group | TCM Public vs. Ratchthani Leasing 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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