Correlation Between Muang Thai and Union Textile

Can any of the company-specific risk be diversified away by investing in both Muang Thai and Union Textile 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 Union Textile 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 Union Textile Industries, you can compare the effects of market volatilities on Muang Thai and Union Textile 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 Union Textile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Muang Thai and Union Textile.

Diversification Opportunities for Muang Thai and Union Textile

0.0

Correlation Coefficient

Muang Thai  Union Textile

Pay attention - limited upside

The 3 months correlation between Muang and Union is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Muang Thai Insurance and Union Textile Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Textile Industries 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 Union Textile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Textile Industries has no effect on the direction of Muang Thai i.e., Muang Thai and Union Textile go up and down completely randomly.

Pair Corralation between Muang Thai and Union Textile

If you would invest  10,600  in Muang Thai Insurance on October 10, 2024 and sell it today you would earn a total of  100.00  from holding Muang Thai Insurance or generate 0.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Muang Thai Insurance  vs.  Union Textile Industries

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.

Union Textile Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Union Textile Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Union Textile is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Muang Thai and Union Textile

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

The idea behind Muang Thai Insurance and Union Textile Industries 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.