Correlation Between Thai Rayon and Thanulux Public
Can any of the company-specific risk be diversified away by investing in both Thai Rayon and Thanulux 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 Rayon and Thanulux Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thai Rayon Public and Thanulux Public, you can compare the effects of market volatilities on Thai Rayon and Thanulux 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 Rayon with a short position of Thanulux Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Rayon and Thanulux Public.
Diversification Opportunities for Thai Rayon and Thanulux Public
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Thai and Thanulux is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Thai Rayon Public and Thanulux Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thanulux Public and Thai Rayon 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 Rayon Public are associated (or correlated) with Thanulux Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thanulux Public has no effect on the direction of Thai Rayon i.e., Thai Rayon and Thanulux Public go up and down completely randomly.
Pair Corralation between Thai Rayon and Thanulux Public
Assuming the 90 days horizon Thai Rayon is expected to generate 1.86 times less return on investment than Thanulux Public. But when comparing it to its historical volatility, Thai Rayon Public is 1.34 times less risky than Thanulux Public. It trades about 0.04 of its potential returns per unit of risk. Thanulux Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. 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 | 90.0% |
| Values | Daily Returns |
Thai Rayon Public vs. Thanulux Public
Performance |
| Timeline |
| Thai Rayon Public |
| Thanulux Public |
Thai Rayon and Thanulux Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Rayon and Thanulux Public
The main advantage of trading using opposite Thai Rayon and Thanulux Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Rayon position performs unexpectedly, Thanulux 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 Thanulux Public will offset losses from the drop in Thanulux Public's long position.| Thai Rayon vs. Thantawan Industry Public | Thai Rayon vs. The Erawan Group | Thai Rayon vs. Jay Mart Public | Thai Rayon vs. Airports of Thailand |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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