Correlation Between Ama Marine and Thai Rung

Can any of the company-specific risk be diversified away by investing in both Ama Marine 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 Ama Marine and Thai Rung into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ama Marine Public and Thai Rung Union, you can compare the effects of market volatilities on Ama Marine 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 Ama Marine with a short position of Thai Rung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ama Marine and Thai Rung.

Diversification Opportunities for Ama Marine and Thai Rung

-0.32

Correlation Coefficient

Ama Marine  Thai Rung

Very good diversification

The 3 months correlation between Ama and Thai is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Ama Marine 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 Ama Marine 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 Ama Marine 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 Ama Marine i.e., Ama Marine and Thai Rung go up and down completely randomly.

Pair Corralation between Ama Marine and Thai Rung

Assuming the 90 days trading horizon Ama Marine is expected to generate 12.96 times less return on investment than Thai Rung. But when comparing it to its historical volatility, Ama Marine Public is 1.37 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 0.36 of returns per unit of risk over similar time horizon. If you would invest  320.00  in Thai Rung Union on October 4, 2024 and sell it today you would earn a total of  22.00  from holding Thai Rung Union or generate 6.88% return on investment over 90 days.

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

Ama Marine Public  vs.  Thai Rung Union

Ama Marine Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ama Marine Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Ama Marine is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Thai Rung Union

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Thai Rung Union are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Thai Rung may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Ama Marine and Thai Rung

The main advantage of trading using opposite Ama Marine and Thai Rung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ama Marine 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.

The idea behind Ama Marine Public and Thai Rung Union 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.