Correlation Between Quality Houses and Thaicom Public

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

By analyzing existing cross correlation between Quality Houses Hotel and Thaicom Public, you can compare the effects of market volatilities on Quality Houses and Thaicom Public 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 Quality Houses with a short position of Thaicom Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quality Houses and Thaicom Public.

Diversification Opportunities for Quality Houses and Thaicom Public

-0.03

Correlation Coefficient

Quality Houses  Thaicom Public

Good diversification

The 3 months correlation between Quality and Thaicom is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Quality Houses Hotel and Thaicom Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thaicom Public and Quality Houses 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 Quality Houses Hotel are associated (or correlated) with Thaicom Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thaicom Public has no effect on the direction of Quality Houses i.e., Quality Houses and Thaicom Public go up and down completely randomly.

Pair Corralation between Quality Houses and Thaicom Public

Assuming the 90 days trading horizon Quality Houses Hotel is expected to under-perform the Thaicom Public. In addition to that, Quality Houses is 8.31 times more volatile than Thaicom Public. It trades about -0.13 of its total potential returns per unit of risk. Thaicom Public is currently generating about 0.06 per unit of volatility. If you would invest  1,238  in Thaicom Public on October 9, 2024 and sell it today you would earn a total of  62.00  from holding Thaicom Public or generate 5.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

Quality Houses Hotel  vs.  Thaicom Public

Quality Houses Hotel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Quality Houses Hotel 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 forward-looking signals remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Thaicom Public

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Thaicom Public are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Thaicom Public is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Quality Houses and Thaicom Public

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

The idea behind Quality Houses Hotel and Thaicom 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.