Correlation Between 3BB INTERNET and TMBThanachart Bank

Can any of the company-specific risk be diversified away by investing in both 3BB INTERNET and TMBThanachart Bank 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 3BB INTERNET and TMBThanachart Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 3BB INTERNET INFRASTRUCTURE and TMBThanachart Bank Public, you can compare the effects of market volatilities on 3BB INTERNET and TMBThanachart Bank 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 3BB INTERNET with a short position of TMBThanachart Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3BB INTERNET and TMBThanachart Bank.

Diversification Opportunities for 3BB INTERNET and TMBThanachart Bank

0.16

Correlation Coefficient

3BB INTERNET  TMBThanachart Bank

Average diversification

The 3 months correlation between 3BB and TMBThanachart is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding 3BB INTERNET INFRASTRUCTURE and TMBThanachart Bank Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TMBThanachart Bank Public and 3BB INTERNET 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 3BB INTERNET INFRASTRUCTURE are associated (or correlated) with TMBThanachart Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TMBThanachart Bank Public has no effect on the direction of 3BB INTERNET i.e., 3BB INTERNET and TMBThanachart Bank go up and down completely randomly.

Pair Corralation between 3BB INTERNET and TMBThanachart Bank

Assuming the 90 days trading horizon 3BB INTERNET INFRASTRUCTURE is expected to under-perform the TMBThanachart Bank. But the stock apears to be less risky and, when comparing its historical volatility, 3BB INTERNET INFRASTRUCTURE is 1.1 times less risky than TMBThanachart Bank. The stock trades about -0.03 of its potential returns per unit of risk. The TMBThanachart Bank Public is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  177.00  in TMBThanachart Bank Public on December 2, 2024 and sell it today you would earn a total of  17.00  from holding TMBThanachart Bank Public or generate 9.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

3BB INTERNET INFRASTRUCTURE  vs.  TMBThanachart Bank Public

3BB INTERNET INFRAST

Risk-Adjusted Performance

Very Weak

Over the last 90 days 3BB INTERNET INFRASTRUCTURE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, 3BB INTERNET is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

TMBThanachart Bank Public

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TMBThanachart Bank Public are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental drivers, TMBThanachart Bank may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with 3BB INTERNET and TMBThanachart Bank

The main advantage of trading using opposite 3BB INTERNET and TMBThanachart Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3BB INTERNET position performs unexpectedly, TMBThanachart Bank 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 TMBThanachart Bank will offset losses from the drop in TMBThanachart Bank's long position.

The idea behind 3BB INTERNET INFRASTRUCTURE and TMBThanachart Bank Public 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.