Correlation Between Vanachai Group and Thai Rung
Can any of the company-specific risk be diversified away by investing in both Vanachai Group and Thai Rung 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 Thai Rung 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 Thai Rung Union, you can compare the effects of market volatilities on Vanachai Group and Thai Rung 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 Thai Rung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanachai Group and Thai Rung.
Diversification Opportunities for Vanachai Group and Thai Rung
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanachai and Thai is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Vanachai Group Public and Thai Rung Union in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Rung Union 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 Thai Rung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Rung Union has no effect on the direction of Vanachai Group i.e., Vanachai Group and Thai Rung go up and down completely randomly.
Pair Corralation between Vanachai Group and Thai Rung
Assuming the 90 days trading horizon Vanachai Group is expected to generate 1.01 times less return on investment than Thai Rung. But when comparing it to its historical volatility, Vanachai Group Public is 1.0 times less risky than Thai Rung. It trades about 0.04 of its potential returns per unit of risk. Thai Rung Union is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 490.00 in Thai Rung Union on September 4, 2024 and sell it today you would lose (170.00) from holding Thai Rung Union or give up 34.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanachai Group Public vs. Thai Rung Union
Performance |
| Timeline |
| Vanachai Group Public |
| Thai Rung Union |
Vanachai Group and Thai Rung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanachai Group and Thai Rung
The main advantage of trading using opposite Vanachai Group and Thai Rung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanachai Group position performs unexpectedly, Thai Rung 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 Rung will offset losses from the drop in Thai Rung'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 |
| Thai Rung vs. Central Pattana Public | Thai Rung vs. CP ALL Public | Thai Rung vs. Bangkok Dusit Medical | Thai Rung 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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