Correlation Between Thai Capital and Thaicom Public

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

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

Diversification Opportunities for Thai Capital and Thaicom Public

0.75

Correlation Coefficient

Thai Capital  Thaicom Public

Poor diversification

The 3 months correlation between Thai and Thaicom is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Thai Capital and Thaicom Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thaicom Public and Thai Capital 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 Thai Capital 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 Thai Capital i.e., Thai Capital and Thaicom Public go up and down completely randomly.

Pair Corralation between Thai Capital and Thaicom Public

Assuming the 90 days trading horizon Thai Capital is expected to under-perform the Thaicom Public. In addition to that, Thai Capital is 1.75 times more volatile than Thaicom Public. It trades about -0.14 of its total potential returns per unit of risk. Thaicom Public is currently generating about -0.18 per unit of volatility. If you would invest  1,170  in Thaicom Public on December 2, 2024 and sell it today you would lose (80.00) from holding Thaicom Public or give up 6.84% of portfolio value over 90 days.

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

Thai Capital  vs.  Thaicom Public

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.

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 Thai Capital and Thaicom Public

The main advantage of trading using opposite Thai Capital and Thaicom Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Capital 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 Thai Capital 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.

Check out your portfolio center.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.