Correlation Between Thai Vegetable and Saha Pathana
Can any of the company-specific risk be diversified away by investing in both Thai Vegetable and Saha Pathana 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 Saha Pathana 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 Saha Pathana Inter Holding, you can compare the effects of market volatilities on Thai Vegetable and Saha Pathana 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 Saha Pathana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Vegetable and Saha Pathana.
Diversification Opportunities for Thai Vegetable and Saha Pathana
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Thai and Saha is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Thai Vegetable Oil and Saha Pathana Inter Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saha Pathana Inter 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 Saha Pathana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saha Pathana Inter has no effect on the direction of Thai Vegetable i.e., Thai Vegetable and Saha Pathana go up and down completely randomly.
Pair Corralation between Thai Vegetable and Saha Pathana
Assuming the 90 days trading horizon Thai Vegetable Oil is expected to under-perform the Saha Pathana. But the stock apears to be less risky and, when comparing its historical volatility, Thai Vegetable Oil is 1.59 times less risky than Saha Pathana. The stock trades about -0.48 of its potential returns per unit of risk. The Saha Pathana Inter Holding is currently generating about -0.24 of returns per unit of risk over similar time horizon. If you would invest 6,250 in Saha Pathana Inter Holding on October 20, 2024 and sell it today you would lose (350.00) from holding Saha Pathana Inter Holding or give up 5.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Thai Vegetable Oil vs. Saha Pathana Inter Holding
Performance |
| Timeline |
| Thai Vegetable Oil |
| Saha Pathana Inter |
Thai Vegetable and Saha Pathana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Vegetable and Saha Pathana
The main advantage of trading using opposite Thai Vegetable and Saha Pathana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Vegetable position performs unexpectedly, Saha Pathana 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 Saha Pathana will offset losses from the drop in Saha Pathana's 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 |
| Saha Pathana vs. AP Public | Saha Pathana vs. Siri Prime Office | Saha Pathana vs. Quality Houses Public | Saha Pathana vs. LPN Development 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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