Correlation Between ThaiDEX SET and United Hero

Can any of the company-specific risk be diversified away by investing in both ThaiDEX SET and United Hero 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 ThaiDEX SET and United Hero into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ThaiDEX SET High and United Hero ETF, you can compare the effects of market volatilities on ThaiDEX SET and United Hero 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 ThaiDEX SET with a short position of United Hero. Check out your portfolio center. Please also check ongoing floating volatility patterns of ThaiDEX SET and United Hero.

Diversification Opportunities for ThaiDEX SET and United Hero

-0.12

Correlation Coefficient

ThaiDEX SET  United Hero

Good diversification

The 3 months correlation between ThaiDEX and United is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding ThaiDEX SET High and United Hero ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Hero ETF and ThaiDEX SET 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 ThaiDEX SET High are associated (or correlated) with United Hero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Hero ETF has no effect on the direction of ThaiDEX SET i.e., ThaiDEX SET and United Hero go up and down completely randomly.

Pair Corralation between ThaiDEX SET and United Hero

Assuming the 90 days trading horizon ThaiDEX SET is expected to generate 553.89 times less return on investment than United Hero. But when comparing it to its historical volatility, ThaiDEX SET High is 235.18 times less risky than United Hero. It trades about 0.08 of its potential returns per unit of risk. United Hero ETF is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  745.00  in United Hero ETF on October 4, 2024 and sell it today you would earn a total of  75.00  from holding United Hero ETF or generate 10.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

ThaiDEX SET High  vs.  United Hero ETF

ThaiDEX SET High

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ThaiDEX SET High has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, ThaiDEX SET is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

United Hero ETF

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in United Hero ETF are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, United Hero sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ThaiDEX SET and United Hero

The main advantage of trading using opposite ThaiDEX SET and United Hero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ThaiDEX SET position performs unexpectedly, United Hero 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 United Hero will offset losses from the drop in United Hero's long position.

The idea behind ThaiDEX SET High and United Hero ETF pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.