Correlation Between TMBThanachart Bank and Ratchthani Leasing
Can any of the company-specific risk be diversified away by investing in both TMBThanachart Bank and Ratchthani Leasing 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 Ratchthani Leasing 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 Ratchthani Leasing Public, you can compare the effects of market volatilities on TMBThanachart Bank and Ratchthani Leasing 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 Ratchthani Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of TMBThanachart Bank and Ratchthani Leasing.
Diversification Opportunities for TMBThanachart Bank and Ratchthani Leasing
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between TMBThanachart and Ratchthani is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding TMBThanachart Bank Public and Ratchthani Leasing Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ratchthani Leasing Public 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 Ratchthani Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ratchthani Leasing Public has no effect on the direction of TMBThanachart Bank i.e., TMBThanachart Bank and Ratchthani Leasing go up and down completely randomly.
Pair Corralation between TMBThanachart Bank and Ratchthani Leasing
Assuming the 90 days trading horizon TMBThanachart Bank is expected to generate 30.34 times less return on investment than Ratchthani Leasing. But when comparing it to its historical volatility, TMBThanachart Bank Public is 39.3 times less risky than Ratchthani Leasing. It trades about 0.06 of its potential returns per unit of risk. Ratchthani Leasing Public is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 297.00 in Ratchthani Leasing Public on August 28, 2024 and sell it today you would lose (124.00) from holding Ratchthani Leasing Public or give up 41.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TMBThanachart Bank Public vs. Ratchthani Leasing Public
Performance |
| Timeline |
| TMBThanachart Bank Public |
| Ratchthani Leasing Public |
TMBThanachart Bank and Ratchthani Leasing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TMBThanachart Bank and Ratchthani Leasing
The main advantage of trading using opposite TMBThanachart Bank and Ratchthani Leasing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TMBThanachart Bank position performs unexpectedly, Ratchthani Leasing 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 Ratchthani Leasing will offset losses from the drop in Ratchthani Leasing'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 |
| Ratchthani Leasing vs. Thanachart Capital Public | Ratchthani Leasing vs. TISCO Financial Group | Ratchthani Leasing vs. Srisawad Power 1979 | Ratchthani Leasing vs. Home Product Center |
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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