Correlation Between PINTHONG INDUSTRIAL and TOA PAINT

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

By analyzing existing cross correlation between PINTHONG INDUSTRIAL PARK and TOA PAINT, you can compare the effects of market volatilities on PINTHONG INDUSTRIAL and TOA PAINT 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 PINTHONG INDUSTRIAL with a short position of TOA PAINT. Check out your portfolio center. Please also check ongoing floating volatility patterns of PINTHONG INDUSTRIAL and TOA PAINT.

Diversification Opportunities for PINTHONG INDUSTRIAL and TOA PAINT

-0.48

Correlation Coefficient

PINTHONG INDUSTRIAL  TOA PAINT

Very good diversification

The 3 months correlation between PINTHONG and TOA is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding PINTHONG INDUSTRIAL PARK and TOA PAINT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOA PAINT and PINTHONG INDUSTRIAL 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 PINTHONG INDUSTRIAL PARK are associated (or correlated) with TOA PAINT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOA PAINT has no effect on the direction of PINTHONG INDUSTRIAL i.e., PINTHONG INDUSTRIAL and TOA PAINT go up and down completely randomly.

Pair Corralation between PINTHONG INDUSTRIAL and TOA PAINT

Assuming the 90 days trading horizon PINTHONG INDUSTRIAL PARK is expected to generate 0.95 times more return on investment than TOA PAINT. However, PINTHONG INDUSTRIAL PARK is 1.06 times less risky than TOA PAINT. It trades about 0.05 of its potential returns per unit of risk. TOA PAINT is currently generating about -0.09 per unit of risk. If you would invest  615.00  in PINTHONG INDUSTRIAL PARK on December 22, 2024 and sell it today you would earn a total of  35.00  from holding PINTHONG INDUSTRIAL PARK or generate 5.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

PINTHONG INDUSTRIAL PARK  vs.  TOA PAINT

PINTHONG INDUSTRIAL PARK

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PINTHONG INDUSTRIAL PARK are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, PINTHONG INDUSTRIAL may actually be approaching a critical reversion point that can send shares even higher in April 2025.

TOA PAINT

Risk-Adjusted Performance

Very Weak

Over the last 90 days TOA PAINT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with PINTHONG INDUSTRIAL and TOA PAINT

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

The idea behind PINTHONG INDUSTRIAL PARK and TOA PAINT 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.