Correlation Between Nasdaq and ThaiDEX SET

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

By analyzing existing cross correlation between Nasdaq Inc and ThaiDEX SET High, you can compare the effects of market volatilities on Nasdaq and ThaiDEX SET 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 Nasdaq with a short position of ThaiDEX SET. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and ThaiDEX SET.

Diversification Opportunities for Nasdaq and ThaiDEX SET

-0.69

Correlation Coefficient

Nasdaq  ThaiDEX SET

Excellent diversification

The 3 months correlation between Nasdaq and ThaiDEX is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and ThaiDEX SET High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ThaiDEX SET High and Nasdaq 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 Nasdaq Inc are associated (or correlated) with ThaiDEX SET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ThaiDEX SET High has no effect on the direction of Nasdaq i.e., Nasdaq and ThaiDEX SET go up and down completely randomly.

Pair Corralation between Nasdaq and ThaiDEX SET

Given the investment horizon of 90 days Nasdaq Inc is expected to generate 1.28 times more return on investment than ThaiDEX SET. However, Nasdaq is 1.28 times more volatile than ThaiDEX SET High. It trades about 0.11 of its potential returns per unit of risk. ThaiDEX SET High is currently generating about -0.22 per unit of risk. If you would invest  7,407  in Nasdaq Inc on September 22, 2024 and sell it today you would earn a total of  363.00  from holding Nasdaq Inc or generate 4.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	97.67%
Values	Daily Returns

Nasdaq Inc  vs.  ThaiDEX SET High

Nasdaq Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Nasdaq is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

ThaiDEX SET High

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ThaiDEX SET High has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Etf's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the ETF venture institutional investors.

Pair Trading with Nasdaq and ThaiDEX SET

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

The idea behind Nasdaq Inc and ThaiDEX SET High 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.