Correlation Between Thai Union and Thai President
Can any of the company-specific risk be diversified away by investing in both Thai Union and Thai President 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 Union and Thai President into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thai Union Group and Thai President Foods, you can compare the effects of market volatilities on Thai Union and Thai President 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 Union with a short position of Thai President. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Union and Thai President.
Diversification Opportunities for Thai Union and Thai President
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Thai and Thai is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Thai Union Group and Thai President Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai President Foods and Thai Union 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 Union Group are associated (or correlated) with Thai President. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai President Foods has no effect on the direction of Thai Union i.e., Thai Union and Thai President go up and down completely randomly.
Pair Corralation between Thai Union and Thai President
Assuming the 90 days trading horizon Thai Union Group is expected to generate 408.37 times more return on investment than Thai President. However, Thai Union is 408.37 times more volatile than Thai President Foods. It trades about 0.14 of its potential returns per unit of risk. Thai President Foods is currently generating about -0.11 per unit of risk. If you would invest 1,301 in Thai Union Group on September 13, 2024 and sell it today you would earn a total of 9.00 from holding Thai Union Group or generate 0.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Union Group vs. Thai President Foods
Performance |
| Timeline |
| Thai Union Group |
| Thai President Foods |
Thai Union and Thai President Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Union and Thai President
The main advantage of trading using opposite Thai Union and Thai President positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Union position performs unexpectedly, Thai President 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 Thai President will offset losses from the drop in Thai President's long position.| Thai Union vs. Krung Thai Bank | Thai Union vs. Thai Oil Public | Thai Union vs. Charoen Pokphand Foods | Thai Union vs. CP ALL Public |
| Thai President vs. GFPT Public | Thai President vs. Dynasty Ceramic Public | Thai President vs. Haad Thip Public | Thai President 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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