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 Property 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

0.89

Correlation Coefficient

Quality Houses  Thaicom Public

Very poor diversification

The 3 months correlation between Quality and Thaicom is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Quality Houses Property 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 Property 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 Property is expected to under-perform the Thaicom Public. But the fund apears to be less risky and, when comparing its historical volatility, Quality Houses Property is 9.81 times less risky than Thaicom Public. The fund trades about -0.07 of its potential returns per unit of risk. The Thaicom Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,238  in Thaicom Public on December 2, 2024 and sell it today you would lose (148.00) from holding Thaicom Public or give up 11.95% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.58%
Values	Daily Returns

Quality Houses Property  vs.  Thaicom Public

Quality Houses Property

Risk-Adjusted Performance

Very Weak

Over the last 90 days Quality Houses Property has generated negative risk-adjusted returns adding no value to fund investors. Despite weak performance in the last few months, the Fund's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the fund institutional investors.

Thaicom Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Thaicom Public has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise 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 Property 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.