Correlation Between ABF Thailand and United Hero

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

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

Diversification Opportunities for ABF Thailand and United Hero

0.06

Correlation Coefficient

ABF Thailand  United Hero

Significant diversification

The 3 months correlation between ABF and United is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding The ABF Thailand 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 ABF Thailand 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 The ABF Thailand 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 ABF Thailand i.e., ABF Thailand and United Hero go up and down completely randomly.

Pair Corralation between ABF Thailand and United Hero

If you would invest  825.00  in United Hero ETF on December 21, 2024 and sell it today you would earn a total of  25.00  from holding United Hero ETF or generate 3.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

The ABF Thailand  vs.  United Hero ETF

ABF Thailand

Risk-Adjusted Performance

Very Weak

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

United Hero ETF

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in United Hero ETF are ranked lower than 18 (%) 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 ABF Thailand and United Hero

The main advantage of trading using opposite ABF Thailand and United Hero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABF Thailand 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 The ABF Thailand 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.

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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.