Correlation Between Thai Union and Tipco Foods
Can any of the company-specific risk be diversified away by investing in both Thai Union and Tipco Foods 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 Tipco Foods 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 Tipco Foods Public, you can compare the effects of market volatilities on Thai Union and Tipco Foods 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 Tipco Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Union and Tipco Foods.
Diversification Opportunities for Thai Union and Tipco Foods
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Thai and Tipco is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Thai Union Group and Tipco Foods Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tipco Foods Public 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 Tipco Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tipco Foods Public has no effect on the direction of Thai Union i.e., Thai Union and Tipco Foods go up and down completely randomly.
Pair Corralation between Thai Union and Tipco Foods
Assuming the 90 days horizon Thai Union Group is expected to under-perform the Tipco Foods. In addition to that, Thai Union is 2.13 times more volatile than Tipco Foods Public. It trades about -0.12 of its total potential returns per unit of risk. Tipco Foods Public is currently generating about -0.18 per unit of volatility. If you would invest 955.00 in Tipco Foods Public on January 15, 2025 and sell it today you would lose (35.00) from holding Tipco Foods Public or give up 3.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Union Group vs. Tipco Foods Public
Performance |
| Timeline |
| Thai Union Group |
| Tipco Foods Public |
Thai Union and Tipco Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Union and Tipco Foods
The main advantage of trading using opposite Thai Union and Tipco Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Union position performs unexpectedly, Tipco Foods 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 Tipco Foods will offset losses from the drop in Tipco Foods' 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 |
| Tipco Foods vs. Tipco Asphalt Public | Tipco Foods vs. Thai Vegetable Oil | Tipco Foods vs. Thai Union Group | Tipco Foods vs. TISCO Financial 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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