Correlation Between UAC Global and Thai Nam
Can any of the company-specific risk be diversified away by investing in both UAC Global and Thai Nam 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 UAC Global and Thai Nam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UAC Global Public and Thai Nam Plastic, you can compare the effects of market volatilities on UAC Global and Thai Nam 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 UAC Global with a short position of Thai Nam. Check out your portfolio center. Please also check ongoing floating volatility patterns of UAC Global and Thai Nam.
Diversification Opportunities for UAC Global and Thai Nam
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between UAC and Thai is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding UAC Global Public and Thai Nam Plastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Nam Plastic and UAC Global 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 UAC Global Public are associated (or correlated) with Thai Nam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Nam Plastic has no effect on the direction of UAC Global i.e., UAC Global and Thai Nam go up and down completely randomly.
Pair Corralation between UAC Global and Thai Nam
Assuming the 90 days trading horizon UAC Global Public is expected to under-perform the Thai Nam. But the stock apears to be less risky and, when comparing its historical volatility, UAC Global Public is 63.76 times less risky than Thai Nam. The stock trades about -0.02 of its potential returns per unit of risk. The Thai Nam Plastic is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 114.00 in Thai Nam Plastic on September 3, 2024 and sell it today you would lose (22.00) from holding Thai Nam Plastic or give up 19.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UAC Global Public vs. Thai Nam Plastic
Performance |
| Timeline |
| UAC Global Public |
| Thai Nam Plastic |
UAC Global and Thai Nam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UAC Global and Thai Nam
The main advantage of trading using opposite UAC Global and Thai Nam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UAC Global position performs unexpectedly, Thai Nam 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 Nam will offset losses from the drop in Thai Nam's long position.| UAC Global vs. Univanich Palm Oil | UAC Global vs. United Paper Public | UAC Global vs. Tipco Foods Public | UAC Global vs. Thai Vegetable Oil |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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