Correlation Between UOB Kay and Trinity Watthana
Can any of the company-specific risk be diversified away by investing in both UOB Kay and Trinity Watthana 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 UOB Kay and Trinity Watthana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UOB Kay Hian and Trinity Watthana Public, you can compare the effects of market volatilities on UOB Kay and Trinity Watthana 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 UOB Kay with a short position of Trinity Watthana. Check out your portfolio center. Please also check ongoing floating volatility patterns of UOB Kay and Trinity Watthana.
Diversification Opportunities for UOB Kay and Trinity Watthana
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between UOB and Trinity is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding UOB Kay Hian and Trinity Watthana Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trinity Watthana Public and UOB Kay 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 UOB Kay Hian are associated (or correlated) with Trinity Watthana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trinity Watthana Public has no effect on the direction of UOB Kay i.e., UOB Kay and Trinity Watthana go up and down completely randomly.
Pair Corralation between UOB Kay and Trinity Watthana
Assuming the 90 days trading horizon UOB Kay is expected to generate 3.12 times less return on investment than Trinity Watthana. But when comparing it to its historical volatility, UOB Kay Hian is 1.56 times less risky than Trinity Watthana. It trades about 0.13 of its potential returns per unit of risk. Trinity Watthana Public is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 366.00 in Trinity Watthana Public on September 2, 2024 and sell it today you would earn a total of 86.00 from holding Trinity Watthana Public or generate 23.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UOB Kay Hian vs. Trinity Watthana Public
Performance |
| Timeline |
| UOB Kay Hian |
| Trinity Watthana Public |
UOB Kay and Trinity Watthana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UOB Kay and Trinity Watthana
The main advantage of trading using opposite UOB Kay and Trinity Watthana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UOB Kay position performs unexpectedly, Trinity Watthana 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 Trinity Watthana will offset losses from the drop in Trinity Watthana's long position.| UOB Kay vs. Trinity Watthana Public | UOB Kay vs. KGI Securities Public | UOB Kay vs. Asia Plus Group | UOB Kay vs. Thitikorn Public |
| Trinity Watthana vs. Asia Plus Group | Trinity Watthana vs. Thitikorn Public | Trinity Watthana vs. TISCO Financial Group | Trinity Watthana vs. KGI Securities 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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