Correlation Between Pato Chemical and Haad Thip

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

By analyzing existing cross correlation between Pato Chemical Industry and Haad Thip Public, you can compare the effects of market volatilities on Pato Chemical and Haad Thip 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 Pato Chemical with a short position of Haad Thip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pato Chemical and Haad Thip.

Diversification Opportunities for Pato Chemical and Haad Thip

0.82

Correlation Coefficient

Pato Chemical  Haad Thip

Very poor diversification

The 3 months correlation between Pato and Haad is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Pato Chemical Industry and Haad Thip Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haad Thip Public and Pato Chemical 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 Pato Chemical Industry are associated (or correlated) with Haad Thip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haad Thip Public has no effect on the direction of Pato Chemical i.e., Pato Chemical and Haad Thip go up and down completely randomly.

Pair Corralation between Pato Chemical and Haad Thip

Assuming the 90 days trading horizon Pato Chemical Industry is expected to under-perform the Haad Thip. But the stock apears to be less risky and, when comparing its historical volatility, Pato Chemical Industry is 1.74 times less risky than Haad Thip. The stock trades about -0.24 of its potential returns per unit of risk. The Haad Thip Public is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest  1,720  in Haad Thip Public on October 24, 2024 and sell it today you would lose (120.00) from holding Haad Thip Public or give up 6.98% of portfolio value over 90 days.

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

Pato Chemical Industry  vs.  Haad Thip Public

Pato Chemical Industry

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pato Chemical Industry has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Haad Thip Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Haad Thip Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Pato Chemical and Haad Thip

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

The idea behind Pato Chemical Industry and Haad Thip Public 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.