Correlation Between TMBThanachart Bank and North East
Can any of the company-specific risk be diversified away by investing in both TMBThanachart Bank and North East 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 TMBThanachart Bank and North East into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TMBThanachart Bank Public and North East Rubbers, you can compare the effects of market volatilities on TMBThanachart Bank and North East 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 TMBThanachart Bank with a short position of North East. Check out your portfolio center. Please also check ongoing floating volatility patterns of TMBThanachart Bank and North East.
Diversification Opportunities for TMBThanachart Bank and North East
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between TMBThanachart and North is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding TMBThanachart Bank Public and North East Rubbers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North East Rubbers and TMBThanachart Bank 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 TMBThanachart Bank Public are associated (or correlated) with North East. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North East Rubbers has no effect on the direction of TMBThanachart Bank i.e., TMBThanachart Bank and North East go up and down completely randomly.
Pair Corralation between TMBThanachart Bank and North East
Assuming the 90 days trading horizon TMBThanachart Bank Public is expected to generate 0.82 times more return on investment than North East. However, TMBThanachart Bank Public is 1.22 times less risky than North East. It trades about 0.06 of its potential returns per unit of risk. North East Rubbers is currently generating about 0.03 per unit of risk. If you would invest 141.00 in TMBThanachart Bank Public on August 28, 2024 and sell it today you would earn a total of 40.00 from holding TMBThanachart Bank Public or generate 28.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.71% |
| Values | Daily Returns |
TMBThanachart Bank Public vs. North East Rubbers
Performance |
| Timeline |
| TMBThanachart Bank Public |
| North East Rubbers |
TMBThanachart Bank and North East Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TMBThanachart Bank and North East
The main advantage of trading using opposite TMBThanachart Bank and North East positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TMBThanachart Bank position performs unexpectedly, North East 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 North East will offset losses from the drop in North East's long position.| TMBThanachart Bank vs. TISCO Financial Group | TMBThanachart Bank vs. Krung Thai Bank | TMBThanachart Bank vs. Kasikornbank Public | TMBThanachart Bank vs. SCB X Public |
| North East vs. NCL International Logistics | North East vs. The Erawan Group | North East vs. Airports of Thailand | North East vs. Eastern Technical Engineering |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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