Correlation Between Quality Houses and Thai Union

Can any of the company-specific risk be diversified away by investing in both Quality Houses and Thai Union 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 Thai Union 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 Thai Union Group, you can compare the effects of market volatilities on Quality Houses and Thai Union 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 Thai Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quality Houses and Thai Union.

Diversification Opportunities for Quality Houses and Thai Union

0.87

Correlation Coefficient

Quality Houses  Thai Union

Very poor diversification

The 3 months correlation between Quality and Thai is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Quality Houses Property and Thai Union Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Union Group 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 Thai Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Union Group has no effect on the direction of Quality Houses i.e., Quality Houses and Thai Union go up and down completely randomly.

Pair Corralation between Quality Houses and Thai Union

Assuming the 90 days trading horizon Quality Houses Property is expected to generate 0.23 times more return on investment than Thai Union. However, Quality Houses Property is 4.43 times less risky than Thai Union. It trades about -0.02 of its potential returns per unit of risk. Thai Union Group is currently generating about -0.13 per unit of risk. If you would invest  468.00  in Quality Houses Property on October 22, 2024 and sell it today you would lose (2.00) from holding Quality Houses Property or give up 0.43% of portfolio value over 90 days.

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

Quality Houses Property  vs.  Thai Union Group

Quality Houses Property

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Quality Houses Property has generated negative risk-adjusted returns adding no value to fund investors. Despite conflicting performance in the last few months, the Fund'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 fund institutional investors.

Thai Union Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thai Union Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers 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.

Pair Trading with Quality Houses and Thai Union

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

The idea behind Quality Houses Property and Thai Union Group 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.