Correlation Between Thai Union and TISCO Financial
Can any of the company-specific risk be diversified away by investing in both Thai Union and TISCO Financial 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 TISCO Financial 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 TISCO Financial Group, you can compare the effects of market volatilities on Thai Union and TISCO Financial 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 TISCO Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Union and TISCO Financial.
Diversification Opportunities for Thai Union and TISCO Financial
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Thai and TISCO is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Thai Union Group and TISCO Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TISCO Financial Group 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 TISCO Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TISCO Financial Group has no effect on the direction of Thai Union i.e., Thai Union and TISCO Financial go up and down completely randomly.
Pair Corralation between Thai Union and TISCO Financial
Assuming the 90 days horizon Thai Union Group is expected to under-perform the TISCO Financial. In addition to that, Thai Union is 4.81 times more volatile than TISCO Financial Group. It trades about -0.33 of its total potential returns per unit of risk. TISCO Financial Group is currently generating about -0.15 per unit of volatility. If you would invest 9,700 in TISCO Financial Group on August 30, 2024 and sell it today you would lose (100.00) from holding TISCO Financial Group or give up 1.03% 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. TISCO Financial Group
Performance |
| Timeline |
| Thai Union Group |
| TISCO Financial Group |
Thai Union and TISCO Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Union and TISCO Financial
The main advantage of trading using opposite Thai Union and TISCO Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Union position performs unexpectedly, TISCO Financial 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 TISCO Financial will offset losses from the drop in TISCO Financial'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 |
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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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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