Correlation Between Thai Rubber and Business Online
Can any of the company-specific risk be diversified away by investing in both Thai Rubber and Business Online 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 Rubber and Business Online into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thai Rubber Latex and Business Online PCL, you can compare the effects of market volatilities on Thai Rubber and Business Online 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 Rubber with a short position of Business Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Rubber and Business Online.
Diversification Opportunities for Thai Rubber and Business Online
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Thai and Business is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Thai Rubber Latex and Business Online PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Business Online PCL and Thai Rubber 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 Rubber Latex are associated (or correlated) with Business Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Business Online PCL has no effect on the direction of Thai Rubber i.e., Thai Rubber and Business Online go up and down completely randomly.
Pair Corralation between Thai Rubber and Business Online
Assuming the 90 days trading horizon Thai Rubber Latex is expected to under-perform the Business Online. In addition to that, Thai Rubber is 1.47 times more volatile than Business Online PCL. It trades about -0.29 of its total potential returns per unit of risk. Business Online PCL is currently generating about -0.04 per unit of volatility. If you would invest 610.00 in Business Online PCL on August 29, 2024 and sell it today you would lose (10.00) from holding Business Online PCL or give up 1.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Thai Rubber Latex vs. Business Online PCL
Performance |
| Timeline |
| Thai Rubber Latex |
| Business Online PCL |
Thai Rubber and Business Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Rubber and Business Online
The main advantage of trading using opposite Thai Rubber and Business Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Rubber position performs unexpectedly, Business Online 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 Business Online will offset losses from the drop in Business Online's long position.| Thai Rubber vs. Thoresen Thai Agencies | Thai Rubber vs. Sri Trang Agro Industry | Thai Rubber vs. TPI Polene Public | Thai Rubber vs. Ratchthani Leasing Public |
| Business Online vs. Moong Pattana International | Business Online vs. Premier Technology Public | Business Online vs. Thai Mitsuwa Public | Business Online vs. The Erawan Group |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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