Correlation Between Dental Public and Trinity Watthana

Can any of the company-specific risk be diversified away by investing in both Dental Public and Trinity Watthana 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 Dental Public and Trinity Watthana into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Dental Public and Trinity Watthana

-0.67

Correlation Coefficient

Dental Public  Trinity Watthana

Excellent diversification

The 3 months correlation between Dental and Trinity is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Dental Public and Trinity Watthana Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trinity Watthana Public and Dental Public 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 Dental Public are associated (or correlated) with Trinity Watthana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trinity Watthana Public has no effect on the direction of Dental Public i.e., Dental Public and Trinity Watthana go up and down completely randomly.

Pair Corralation between Dental Public and Trinity Watthana

Given the investment horizon of 90 days Dental Public is expected to generate 0.31 times more return on investment than Trinity Watthana. However, Dental Public is 3.25 times less risky than Trinity Watthana. It trades about -0.46 of its potential returns per unit of risk. Trinity Watthana Public is currently generating about -0.56 per unit of risk. If you would invest  314.00  in Dental Public on October 11, 2024 and sell it today you would lose (22.00) from holding Dental Public or give up 7.01% of portfolio value over 90 days.

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

Dental Public  vs.  Trinity Watthana Public

Dental Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dental Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Trinity Watthana Public

Risk-Adjusted Performance

0 of 100

Weak

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

Pair Trading with Dental Public and Trinity Watthana

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

The idea behind Dental Public and Trinity Watthana 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.