Correlation Between Thai Vegetable and Thai Union
Can any of the company-specific risk be diversified away by investing in both Thai Vegetable and Thai Union 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 Thai Union 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 Thai Union Group, you can compare the effects of market volatilities on Thai Vegetable and Thai Union 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 Thai Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Vegetable and Thai Union.
Diversification Opportunities for Thai Vegetable and Thai Union
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Thai and Thai is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Thai Vegetable Oil and Thai Union Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Union Group 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 Thai Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Union Group has no effect on the direction of Thai Vegetable i.e., Thai Vegetable and Thai Union go up and down completely randomly.
Pair Corralation between Thai Vegetable and Thai Union
Assuming the 90 days trading horizon Thai Vegetable Oil is expected to generate 0.86 times more return on investment than Thai Union. However, Thai Vegetable Oil is 1.16 times less risky than Thai Union. It trades about -0.09 of its potential returns per unit of risk. Thai Union Group is currently generating about -0.17 per unit of risk. If you would invest 2,390 in Thai Vegetable Oil on September 3, 2024 and sell it today you would lose (100.00) from holding Thai Vegetable Oil or give up 4.18% 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. Thai Union Group
Performance |
| Timeline |
| Thai Vegetable Oil |
| Thai Union Group |
Thai Vegetable and Thai Union Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Vegetable and Thai Union
The main advantage of trading using opposite Thai Vegetable and Thai Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Vegetable position performs unexpectedly, Thai Union 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 Thai Union will offset losses from the drop in Thai Union'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 |
| Thai Union vs. Charoen Pokphand Foods | Thai Union vs. CP ALL Public | Thai Union vs. Minor International Public | Thai Union vs. Advanced Info Service |
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
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |