Correlation Between Thai Vegetable and Quality Houses
Can any of the company-specific risk be diversified away by investing in both Thai Vegetable and Quality Houses 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 Quality Houses 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 Quality Houses Public, you can compare the effects of market volatilities on Thai Vegetable and Quality Houses 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 Quality Houses. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Vegetable and Quality Houses.
Diversification Opportunities for Thai Vegetable and Quality Houses
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Thai and Quality is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Thai Vegetable Oil and Quality Houses Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quality Houses 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 Quality Houses. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quality Houses Public has no effect on the direction of Thai Vegetable i.e., Thai Vegetable and Quality Houses go up and down completely randomly.
Pair Corralation between Thai Vegetable and Quality Houses
Assuming the 90 days trading horizon Thai Vegetable Oil is expected to under-perform the Quality Houses. But the stock apears to be less risky and, when comparing its historical volatility, Thai Vegetable Oil is 1.09 times less risky than Quality Houses. The stock trades about -0.48 of its potential returns per unit of risk. The Quality Houses Public is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 171.00 in Quality Houses Public on October 20, 2024 and sell it today you would earn a total of 0.00 from holding Quality Houses Public or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Thai Vegetable Oil vs. Quality Houses Public
Performance |
| Timeline |
| Thai Vegetable Oil |
| Quality Houses Public |
Thai Vegetable and Quality Houses Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Vegetable and Quality Houses
The main advantage of trading using opposite Thai Vegetable and Quality Houses positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Vegetable position performs unexpectedly, Quality Houses 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 Quality Houses will offset losses from the drop in Quality Houses' long position.| Thai Vegetable vs. Charoen Pokphand Foods | Thai Vegetable vs. Thai Union Group | Thai Vegetable vs. TISCO Financial Group | Thai Vegetable vs. Thanachart Capital Public |
| Quality Houses vs. Land and Houses | Quality Houses vs. AP Public | Quality Houses vs. Siri Prime Office | Quality Houses vs. PTT 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 CEOs Directory module to screen CEOs from public companies around the world.
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