Correlation Between RPCG Public and Thai Capital

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

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

Diversification Opportunities for RPCG Public and Thai Capital

0.94

Correlation Coefficient

RPCG Public  Thai Capital

Almost no diversification

The 3 months correlation between RPCG and Thai is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding RPCG Public and Thai Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Capital and RPCG Public 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 RPCG Public are associated (or correlated) with Thai Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Capital has no effect on the direction of RPCG Public i.e., RPCG Public and Thai Capital go up and down completely randomly.

Pair Corralation between RPCG Public and Thai Capital

Assuming the 90 days trading horizon RPCG Public is expected to under-perform the Thai Capital. In addition to that, RPCG Public is 1.48 times more volatile than Thai Capital. It trades about -0.19 of its total potential returns per unit of risk. Thai Capital is currently generating about -0.05 per unit of volatility. If you would invest  29.00  in Thai Capital on December 4, 2024 and sell it today you would lose (1.00) from holding Thai Capital or give up 3.45% of portfolio value over 90 days.

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

RPCG Public  vs.  Thai Capital

RPCG Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days RPCG Public 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 indicators 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 company institutional investors.

Thai Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Thai Capital 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 indicators 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 company institutional investors.

Pair Trading with RPCG Public and Thai Capital

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

The idea behind RPCG Public and Thai Capital 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.