Correlation Between Thai Vegetable and Taokaenoi Food
Can any of the company-specific risk be diversified away by investing in both Thai Vegetable 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 Vegetable 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 Vegetable Oil and Taokaenoi Food Marketing, you can compare the effects of market volatilities on Thai Vegetable 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 Vegetable with a short position of Taokaenoi Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Vegetable and Taokaenoi Food.
Diversification Opportunities for Thai Vegetable and Taokaenoi Food
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Thai and Taokaenoi is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Thai Vegetable Oil 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 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 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 Vegetable i.e., Thai Vegetable and Taokaenoi Food go up and down completely randomly.
Pair Corralation between Thai Vegetable and Taokaenoi Food
Assuming the 90 days trading horizon Thai Vegetable Oil is expected to generate 60.13 times more return on investment than Taokaenoi Food. However, Thai Vegetable is 60.13 times more volatile than Taokaenoi Food Marketing. It trades about 0.14 of its potential returns per unit of risk. Taokaenoi Food Marketing is currently generating about -0.16 per unit of risk. If you would invest 2,535 in Thai Vegetable Oil on September 13, 2024 and sell it today you would lose (245.00) from holding Thai Vegetable Oil or give up 9.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Vegetable Oil vs. Taokaenoi Food Marketing
Performance |
| Timeline |
| Thai Vegetable Oil |
| Taokaenoi Food Marketing |
Thai Vegetable and Taokaenoi Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Vegetable and Taokaenoi Food
The main advantage of trading using opposite Thai Vegetable and Taokaenoi Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Vegetable 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 Vegetable vs. Thai Union Group | Thai Vegetable vs. Charoen Pokphand Foods | Thai Vegetable vs. CP ALL Public | Thai Vegetable vs. Intouch Holdings Public |
| Taokaenoi Food vs. GFPT Public | Taokaenoi Food vs. Dynasty Ceramic Public | Taokaenoi Food vs. Haad Thip Public | Taokaenoi Food vs. The Erawan 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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