Correlation Between Thai Union and Asian Sea
Can any of the company-specific risk be diversified away by investing in both Thai Union and Asian Sea 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 Asian Sea 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 Asian Sea, you can compare the effects of market volatilities on Thai Union and Asian Sea 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 Asian Sea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Union and Asian Sea.
Diversification Opportunities for Thai Union and Asian Sea
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Thai and Asian is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Thai Union Group and Asian Sea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asian Sea 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 Asian Sea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asian Sea has no effect on the direction of Thai Union i.e., Thai Union and Asian Sea go up and down completely randomly.
Pair Corralation between Thai Union and Asian Sea
Assuming the 90 days horizon Thai Union Group is expected to generate 61.86 times more return on investment than Asian Sea. However, Thai Union is 61.86 times more volatile than Asian Sea. It trades about 0.11 of its potential returns per unit of risk. Asian Sea is currently generating about -0.05 per unit of risk. If you would invest 1,530 in Thai Union Group on August 28, 2024 and sell it today you would lose (160.00) from holding Thai Union Group or give up 10.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Union Group vs. Asian Sea
Performance |
| Timeline |
| Thai Union Group |
| Asian Sea |
Thai Union and Asian Sea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Union and Asian Sea
The main advantage of trading using opposite Thai Union and Asian Sea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Union position performs unexpectedly, Asian Sea 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 Asian Sea will offset losses from the drop in Asian Sea's long position.| Thai Union vs. Charoen Pokphand Foods | Thai Union vs. CP ALL Public | Thai Union vs. Minor International Public | Thai Union vs. Advanced Info Service |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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