Correlation Between Vanachai Group and Union Mosaic
Can any of the company-specific risk be diversified away by investing in both Vanachai Group and Union Mosaic 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 Union Mosaic 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 The Union Mosaic, you can compare the effects of market volatilities on Vanachai Group and Union Mosaic 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 Union Mosaic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanachai Group and Union Mosaic.
Diversification Opportunities for Vanachai Group and Union Mosaic
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vanachai and Union is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Vanachai Group Public and The Union Mosaic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Mosaic 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 Union Mosaic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Mosaic has no effect on the direction of Vanachai Group i.e., Vanachai Group and Union Mosaic go up and down completely randomly.
Pair Corralation between Vanachai Group and Union Mosaic
Assuming the 90 days trading horizon Vanachai Group is expected to generate 1.0 times less return on investment than Union Mosaic. But when comparing it to its historical volatility, Vanachai Group Public is 1.0 times less risky than Union Mosaic. It trades about 0.08 of its potential returns per unit of risk. The Union Mosaic is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 67.00 in The Union Mosaic on November 3, 2024 and sell it today you would lose (9.00) from holding The Union Mosaic or give up 13.43% 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. The Union Mosaic
Performance |
| Timeline |
| Vanachai Group Public |
| Union Mosaic |
Vanachai Group and Union Mosaic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanachai Group and Union Mosaic
The main advantage of trading using opposite Vanachai Group and Union Mosaic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanachai Group position performs unexpectedly, Union Mosaic 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 Union Mosaic will offset losses from the drop in Union Mosaic'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 |
| Union Mosaic vs. Thoresen Thai Agencies | Union Mosaic vs. Regional Container Lines | Union Mosaic vs. The Siam Cement | Union Mosaic vs. PTT 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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