Correlation Between Vanachai Group and TCM Public
Can any of the company-specific risk be diversified away by investing in both Vanachai Group and TCM Public 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 Vanachai Group and TCM Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanachai Group Public and TCM Public, you can compare the effects of market volatilities on Vanachai Group and TCM Public 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 Vanachai Group with a short position of TCM Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanachai Group and TCM Public.
Diversification Opportunities for Vanachai Group and TCM Public
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vanachai and TCM is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Vanachai Group Public and TCM Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TCM Public and Vanachai Group 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 Vanachai Group Public are associated (or correlated) with TCM Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TCM Public has no effect on the direction of Vanachai Group i.e., Vanachai Group and TCM Public go up and down completely randomly.
Pair Corralation between Vanachai Group and TCM Public
Assuming the 90 days trading horizon Vanachai Group Public is expected to generate 0.29 times more return on investment than TCM Public. However, Vanachai Group Public is 3.49 times less risky than TCM Public. It trades about -0.07 of its potential returns per unit of risk. TCM Public is currently generating about -0.22 per unit of risk. If you would invest 334.00 in Vanachai Group Public on September 4, 2024 and sell it today you would lose (4.00) from holding Vanachai Group Public or give up 1.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanachai Group Public vs. TCM Public
Performance |
| Timeline |
| Vanachai Group Public |
| TCM Public |
Vanachai Group and TCM Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanachai Group and TCM Public
The main advantage of trading using opposite Vanachai Group and TCM Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanachai Group position performs unexpectedly, TCM Public 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 TCM Public will offset losses from the drop in TCM Public's long position.| Vanachai Group vs. Thoresen Thai Agencies | Vanachai Group vs. The Siam Cement | Vanachai Group vs. Dynasty Ceramic Public | Vanachai Group vs. Precious Shipping Public |
| TCM Public vs. Central Pattana Public | TCM Public vs. CP ALL Public | TCM Public vs. Bangkok Dusit Medical | TCM Public vs. Airports of Thailand |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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