Correlation Between Information and Thai Credit

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

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

Diversification Opportunities for Information and Thai Credit

-0.41

Correlation Coefficient

Information  Thai Credit

Very good diversification

The 3 months correlation between Information and Thai is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Information and Communication 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 Information 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 Information and Communication 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 Information i.e., Information and Thai Credit go up and down completely randomly.

Pair Corralation between Information and Thai Credit

Assuming the 90 days trading horizon Information is expected to generate 9.1 times less return on investment than Thai Credit. But when comparing it to its historical volatility, Information and Communication is 1.46 times less risky than Thai Credit. It trades about 0.01 of its potential returns per unit of risk. Thai Credit Pcl is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,810  in Thai Credit Pcl on December 24, 2024 and sell it today you would earn a total of  150.00  from holding Thai Credit Pcl or generate 8.29% return on investment over 90 days.

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

Information and Communication  vs.  Thai Credit Pcl

Information and Comm

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Information and Communication are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Information is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional 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 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak 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 Information and Thai Credit

The main advantage of trading using opposite Information and Thai Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Information 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 Information and Communication 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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.