Correlation Between Delta Electronics and Thai Credit

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

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

Diversification Opportunities for Delta Electronics and Thai Credit

-0.03

Correlation Coefficient

Delta Electronics  Thai Credit

Good diversification

The 3 months correlation between Delta and Thai is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Delta Electronics Public and Thai Credit Pcl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Credit Pcl and Delta Electronics 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 Delta Electronics Public are associated (or correlated) with Thai Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Credit Pcl has no effect on the direction of Delta Electronics i.e., Delta Electronics and Thai Credit go up and down completely randomly.

Pair Corralation between Delta Electronics and Thai Credit

Assuming the 90 days trading horizon Delta Electronics Public is expected to under-perform the Thai Credit. In addition to that, Delta Electronics is 2.62 times more volatile than Thai Credit Pcl. It trades about -0.23 of its total potential returns per unit of risk. Thai Credit Pcl is currently generating about 0.06 per unit of volatility. If you would invest  1,850  in Thai Credit Pcl on December 28, 2024 and sell it today you would earn a total of  110.00  from holding Thai Credit Pcl or generate 5.95% return on investment over 90 days.

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

Delta Electronics Public  vs.  Thai Credit Pcl

Delta Electronics Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Delta Electronics Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Thai Credit Pcl

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Thai Credit Pcl are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting technical and fundamental indicators, Thai Credit may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Delta Electronics and Thai Credit

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

The idea behind Delta Electronics Public and Thai Credit Pcl 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..