Correlation Between Thai Union and Taokaenoi Food
Can any of the company-specific risk be diversified away by investing in both Thai Union and Taokaenoi Food 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 Taokaenoi Food 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 Taokaenoi Food Marketing, you can compare the effects of market volatilities on Thai Union and Taokaenoi Food 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 Taokaenoi Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Union and Taokaenoi Food.
Diversification Opportunities for Thai Union and Taokaenoi Food
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Thai and Taokaenoi is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Thai Union Group and Taokaenoi Food Marketing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taokaenoi Food Marketing 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 Taokaenoi Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taokaenoi Food Marketing has no effect on the direction of Thai Union i.e., Thai Union and Taokaenoi Food go up and down completely randomly.
Pair Corralation between Thai Union and Taokaenoi Food
Assuming the 90 days horizon Thai Union Group is expected to generate 0.64 times more return on investment than Taokaenoi Food. However, Thai Union Group is 1.55 times less risky than Taokaenoi Food. It trades about -0.33 of its potential returns per unit of risk. Taokaenoi Food Marketing is currently generating about -0.5 per unit of risk. If you would invest 1,510 in Thai Union Group on August 30, 2024 and sell it today you would lose (160.00) from holding Thai Union Group or give up 10.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Union Group vs. Taokaenoi Food Marketing
Performance |
| Timeline |
| Thai Union Group |
| Taokaenoi Food Marketing |
Thai Union and Taokaenoi Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Union and Taokaenoi Food
The main advantage of trading using opposite Thai Union and Taokaenoi Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Union position performs unexpectedly, Taokaenoi Food 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 Taokaenoi Food will offset losses from the drop in Taokaenoi Food'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 |
| Taokaenoi Food vs. CP ALL Public | Taokaenoi Food vs. Carabao Group Public | Taokaenoi Food vs. Thai Union Group | Taokaenoi Food vs. Minor International Public |
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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