Correlation Between VGI Public and TKrungthai Industries
Can any of the company-specific risk be diversified away by investing in both VGI Public and TKrungthai Industries 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 VGI Public and TKrungthai Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VGI Public and TKrungthai Industries Public, you can compare the effects of market volatilities on VGI Public and TKrungthai Industries 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 VGI Public with a short position of TKrungthai Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of VGI Public and TKrungthai Industries.
Diversification Opportunities for VGI Public and TKrungthai Industries
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VGI and TKrungthai is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding VGI Public and TKrungthai Industries Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TKrungthai Industries and VGI Public 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 VGI Public are associated (or correlated) with TKrungthai Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TKrungthai Industries has no effect on the direction of VGI Public i.e., VGI Public and TKrungthai Industries go up and down completely randomly.
Pair Corralation between VGI Public and TKrungthai Industries
Assuming the 90 days trading horizon VGI Public is expected to generate 1.41 times more return on investment than TKrungthai Industries. However, VGI Public is 1.41 times more volatile than TKrungthai Industries Public. It trades about 0.11 of its potential returns per unit of risk. TKrungthai Industries Public is currently generating about 0.08 per unit of risk. If you would invest 286.00 in VGI Public on September 3, 2024 and sell it today you would lose (4.00) from holding VGI Public or give up 1.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VGI Public vs. TKrungthai Industries Public
Performance |
| Timeline |
| VGI Public |
| TKrungthai Industries |
VGI Public and TKrungthai Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VGI Public and TKrungthai Industries
The main advantage of trading using opposite VGI Public and TKrungthai Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VGI Public position performs unexpectedly, TKrungthai Industries 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 TKrungthai Industries will offset losses from the drop in TKrungthai Industries' long position.| VGI Public vs. Delta Electronics Public | VGI Public vs. Delta Electronics Public | VGI Public vs. Airports of Thailand | VGI Public vs. Airports of Thailand |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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