Correlation Between Muang Thai and Namwiwat Medical

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

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

Diversification Opportunities for Muang Thai and Namwiwat Medical

0.33

Correlation Coefficient

Muang Thai  Namwiwat Medical

Weak diversification

The 3 months correlation between Muang and Namwiwat is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Muang Thai Insurance and Namwiwat Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Namwiwat Medical and Muang Thai 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 Muang Thai Insurance are associated (or correlated) with Namwiwat Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Namwiwat Medical has no effect on the direction of Muang Thai i.e., Muang Thai and Namwiwat Medical go up and down completely randomly.

Pair Corralation between Muang Thai and Namwiwat Medical

Assuming the 90 days trading horizon Muang Thai Insurance is expected to generate 0.77 times more return on investment than Namwiwat Medical. However, Muang Thai Insurance is 1.3 times less risky than Namwiwat Medical. It trades about -0.01 of its potential returns per unit of risk. Namwiwat Medical is currently generating about -0.06 per unit of risk. If you would invest  10,800  in Muang Thai Insurance on September 14, 2024 and sell it today you would lose (100.00) from holding Muang Thai Insurance or give up 0.93% of portfolio value over 90 days.

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

Muang Thai Insurance  vs.  Namwiwat Medical

Muang Thai Insurance

Risk-Adjusted Performance

0 of 100

Very Weak

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

Namwiwat Medical

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Muang Thai and Namwiwat Medical

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

The idea behind Muang Thai Insurance and Namwiwat Medical 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.