Correlation Between Thai Vegetable and VGI Public
Can any of the company-specific risk be diversified away by investing in both Thai Vegetable and VGI Public 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 VGI Public 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 VGI Public, you can compare the effects of market volatilities on Thai Vegetable and VGI Public 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 VGI Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Vegetable and VGI Public.
Diversification Opportunities for Thai Vegetable and VGI Public
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Thai and VGI is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Thai Vegetable Oil and VGI Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VGI 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 VGI Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VGI Public has no effect on the direction of Thai Vegetable i.e., Thai Vegetable and VGI Public go up and down completely randomly.
Pair Corralation between Thai Vegetable and VGI Public
Assuming the 90 days trading horizon Thai Vegetable is expected to generate 1.0 times less return on investment than VGI Public. In addition to that, Thai Vegetable is 1.0 times more volatile than VGI Public. It trades about 0.11 of its total potential returns per unit of risk. VGI Public is currently generating about 0.11 per unit of volatility. If you would invest 286.00 in VGI Public on September 1, 2024 and sell it today you would lose (4.00) from holding VGI Public or give up 1.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Vegetable Oil vs. VGI Public
Performance |
| Timeline |
| Thai Vegetable Oil |
| VGI Public |
Thai Vegetable and VGI Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Vegetable and VGI Public
The main advantage of trading using opposite Thai Vegetable and VGI Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Vegetable position performs unexpectedly, VGI Public 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 VGI Public will offset losses from the drop in VGI Public's long position.| Thai Vegetable vs. Mega Lifesciences Public | Thai Vegetable vs. Com7 PCL | Thai Vegetable vs. Thai Union Group | Thai Vegetable vs. Jay Mart Public |
| VGI Public vs. WHA Public | VGI Public vs. Thai Union Group | VGI Public vs. VGI Public | VGI Public vs. Thai Vegetable Oil |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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