Correlation Between TMBThanachart Bank and PG E

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

By analyzing existing cross correlation between TMBThanachart Bank Public and PG E P6, you can compare the effects of market volatilities on TMBThanachart Bank and PG E 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 TMBThanachart Bank with a short position of PG E. Check out your portfolio center. Please also check ongoing floating volatility patterns of TMBThanachart Bank and PG E.

Diversification Opportunities for TMBThanachart Bank and PG E

-0.58

Correlation Coefficient

TMBThanachart Bank  PG E

Excellent diversification

The 3 months correlation between TMBThanachart and PCG6 is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding TMBThanachart Bank Public and PG E P6 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PG E P6 and TMBThanachart Bank 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 TMBThanachart Bank Public are associated (or correlated) with PG E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PG E P6 has no effect on the direction of TMBThanachart Bank i.e., TMBThanachart Bank and PG E go up and down completely randomly.

Pair Corralation between TMBThanachart Bank and PG E

Assuming the 90 days trading horizon TMBThanachart Bank Public is expected to under-perform the PG E. In addition to that, TMBThanachart Bank is 1.69 times more volatile than PG E P6. It trades about -0.05 of its total potential returns per unit of risk. PG E P6 is currently generating about 0.08 per unit of volatility. If you would invest  2,064  in PG E P6 on September 22, 2024 and sell it today you would earn a total of  116.00  from holding PG E P6 or generate 5.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.48%
Values	Daily Returns

TMBThanachart Bank Public  vs.  PG E P6

TMBThanachart Bank Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TMBThanachart Bank Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, TMBThanachart Bank is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

PG E P6

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PG E P6 are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, PG E is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with TMBThanachart Bank and PG E

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

The idea behind TMBThanachart Bank Public and PG E P6 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.