Correlation Between Thai Vegetable and Kingsmen CMTI
Can any of the company-specific risk be diversified away by investing in both Thai Vegetable and Kingsmen CMTI 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 Vegetable and Kingsmen CMTI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thai Vegetable Oil and Kingsmen CMTI Public, you can compare the effects of market volatilities on Thai Vegetable and Kingsmen CMTI 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 Vegetable with a short position of Kingsmen CMTI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Vegetable and Kingsmen CMTI.
Diversification Opportunities for Thai Vegetable and Kingsmen CMTI
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Thai and Kingsmen is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Thai Vegetable Oil and Kingsmen CMTI Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingsmen CMTI Public and Thai Vegetable 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 Vegetable Oil are associated (or correlated) with Kingsmen CMTI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingsmen CMTI Public has no effect on the direction of Thai Vegetable i.e., Thai Vegetable and Kingsmen CMTI go up and down completely randomly.
Pair Corralation between Thai Vegetable and Kingsmen CMTI
Assuming the 90 days trading horizon Thai Vegetable Oil is expected to under-perform the Kingsmen CMTI. But the stock apears to be less risky and, when comparing its historical volatility, Thai Vegetable Oil is 2.34 times less risky than Kingsmen CMTI. The stock trades about -0.32 of its potential returns per unit of risk. The Kingsmen CMTI Public is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 125.00 in Kingsmen CMTI Public on September 13, 2024 and sell it today you would lose (8.00) from holding Kingsmen CMTI Public or give up 6.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Vegetable Oil vs. Kingsmen CMTI Public
Performance |
| Timeline |
| Thai Vegetable Oil |
| Kingsmen CMTI Public |
Thai Vegetable and Kingsmen CMTI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Vegetable and Kingsmen CMTI
The main advantage of trading using opposite Thai Vegetable and Kingsmen CMTI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Vegetable position performs unexpectedly, Kingsmen CMTI 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 Kingsmen CMTI will offset losses from the drop in Kingsmen CMTI's long position.| Thai Vegetable vs. Thai Union Group | Thai Vegetable vs. Charoen Pokphand Foods | Thai Vegetable vs. CP ALL Public | Thai Vegetable vs. Intouch Holdings Public |
| Kingsmen CMTI vs. Cho Thavee Public | Kingsmen CMTI vs. G Capital Public | Kingsmen CMTI vs. Thai Ha Public | Kingsmen CMTI vs. Panjawattana Plastic 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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