Correlation Between Thai Union and Univanich Palm
Can any of the company-specific risk be diversified away by investing in both Thai Union and Univanich Palm 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 Univanich Palm 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 Univanich Palm Oil, you can compare the effects of market volatilities on Thai Union and Univanich Palm 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 Univanich Palm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Union and Univanich Palm.
Diversification Opportunities for Thai Union and Univanich Palm
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Thai and Univanich is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Thai Union Group and Univanich Palm Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Univanich Palm Oil 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 Univanich Palm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Univanich Palm Oil has no effect on the direction of Thai Union i.e., Thai Union and Univanich Palm go up and down completely randomly.
Pair Corralation between Thai Union and Univanich Palm
Assuming the 90 days horizon Thai Union Group is expected to generate 39.9 times more return on investment than Univanich Palm. However, Thai Union is 39.9 times more volatile than Univanich Palm Oil. It trades about 0.04 of its potential returns per unit of risk. Univanich Palm Oil is currently generating about 0.07 per unit of risk. If you would invest 1,562 in Thai Union Group on August 30, 2024 and sell it today you would lose (212.00) from holding Thai Union Group or give up 13.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Union Group vs. Univanich Palm Oil
Performance |
| Timeline |
| Thai Union Group |
| Univanich Palm Oil |
Thai Union and Univanich Palm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Union and Univanich Palm
The main advantage of trading using opposite Thai Union and Univanich Palm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Union position performs unexpectedly, Univanich Palm 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 Univanich Palm will offset losses from the drop in Univanich Palm'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 |
| Univanich Palm vs. Chumporn Palm Oil | Univanich Palm vs. United Palm Oil | Univanich Palm vs. Thai Vegetable Oil | Univanich Palm vs. Sri Trang Agro Industry |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |