Correlation Between Thai Vegetable and TMT Steel
Can any of the company-specific risk be diversified away by investing in both Thai Vegetable and TMT Steel 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 TMT Steel 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 TMT Steel Public, you can compare the effects of market volatilities on Thai Vegetable and TMT Steel 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 TMT Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Vegetable and TMT Steel.
Diversification Opportunities for Thai Vegetable and TMT Steel
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Thai and TMT is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Thai Vegetable Oil and TMT Steel Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TMT Steel 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 TMT Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TMT Steel Public has no effect on the direction of Thai Vegetable i.e., Thai Vegetable and TMT Steel go up and down completely randomly.
Pair Corralation between Thai Vegetable and TMT Steel
Assuming the 90 days trading horizon Thai Vegetable Oil is expected to under-perform the TMT Steel. But the stock apears to be less risky and, when comparing its historical volatility, Thai Vegetable Oil is 39.18 times less risky than TMT Steel. The stock trades about -0.01 of its potential returns per unit of risk. The TMT Steel Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 711.00 in TMT Steel Public on August 26, 2024 and sell it today you would lose (369.00) from holding TMT Steel Public or give up 51.9% 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. TMT Steel Public
Performance |
| Timeline |
| Thai Vegetable Oil |
| TMT Steel Public |
Thai Vegetable and TMT Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Vegetable and TMT Steel
The main advantage of trading using opposite Thai Vegetable and TMT Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Vegetable position performs unexpectedly, TMT Steel 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 TMT Steel will offset losses from the drop in TMT Steel's long position.| Thai Vegetable vs. CP ALL Public | Thai Vegetable vs. Thai Union Group | Thai Vegetable vs. Minor International Public | Thai Vegetable vs. Central Pattana Public |
| TMT Steel vs. MCS Steel Public | TMT Steel vs. Thai Vegetable Oil | TMT Steel vs. Pacific Pipe Public | TMT Steel vs. Tipco Foods 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |