Correlation Between Thai Wah and CENTRAL RETAIL
Can any of the company-specific risk be diversified away by investing in both Thai Wah and CENTRAL RETAIL 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 Wah and CENTRAL RETAIL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thai Wah Public and CENTRAL RETAIL P, you can compare the effects of market volatilities on Thai Wah and CENTRAL RETAIL 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 Wah with a short position of CENTRAL RETAIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Wah and CENTRAL RETAIL.
Diversification Opportunities for Thai Wah and CENTRAL RETAIL
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Thai and CENTRAL is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Thai Wah Public and CENTRAL RETAIL P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CENTRAL RETAIL P and Thai Wah 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 Wah Public are associated (or correlated) with CENTRAL RETAIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CENTRAL RETAIL P has no effect on the direction of Thai Wah i.e., Thai Wah and CENTRAL RETAIL go up and down completely randomly.
Pair Corralation between Thai Wah and CENTRAL RETAIL
Assuming the 90 days trading horizon Thai Wah Public is expected to under-perform the CENTRAL RETAIL. But the stock apears to be less risky and, when comparing its historical volatility, Thai Wah Public is 1.14 times less risky than CENTRAL RETAIL. The stock trades about -0.38 of its potential returns per unit of risk. The CENTRAL RETAIL P is currently generating about -0.22 of returns per unit of risk over similar time horizon. If you would invest 3,925 in CENTRAL RETAIL P on October 24, 2024 and sell it today you would lose (475.00) from holding CENTRAL RETAIL P or give up 12.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Wah Public vs. CENTRAL RETAIL P
Performance |
| Timeline |
| Thai Wah Public |
| CENTRAL RETAIL P |
Thai Wah and CENTRAL RETAIL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Wah and CENTRAL RETAIL
The main advantage of trading using opposite Thai Wah and CENTRAL RETAIL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Wah position performs unexpectedly, CENTRAL RETAIL 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 CENTRAL RETAIL will offset losses from the drop in CENTRAL RETAIL's long position.| Thai Wah vs. Bangkok Sheet Metal | Thai Wah vs. 2S Metal Public | Thai Wah vs. Heng Leasing Capital | Thai Wah vs. Asia Metal Public |
| CENTRAL RETAIL vs. Digital Telecommunications Infrastructure | CENTRAL RETAIL vs. Thonburi Healthcare Grp | CENTRAL RETAIL vs. Information and Communication | CENTRAL RETAIL vs. Thai Nakarin Hospital |
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 Stocks Directory module to find actively traded stocks across global markets.
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