Correlation Between Thaifoods Group and Pylon Public

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

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

Diversification Opportunities for Thaifoods Group and Pylon Public

0.42

Correlation Coefficient

Thaifoods Group  Pylon Public

Very weak diversification

The 3 months correlation between Thaifoods and Pylon is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Thaifoods Group Public and Pylon Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pylon Public and Thaifoods Group 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 Thaifoods Group Public are associated (or correlated) with Pylon Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pylon Public has no effect on the direction of Thaifoods Group i.e., Thaifoods Group and Pylon Public go up and down completely randomly.

Pair Corralation between Thaifoods Group and Pylon Public

Assuming the 90 days trading horizon Thaifoods Group Public is expected to generate 2.03 times more return on investment than Pylon Public. However, Thaifoods Group is 2.03 times more volatile than Pylon Public. It trades about 0.23 of its potential returns per unit of risk. Pylon Public is currently generating about 0.0 per unit of risk. If you would invest  320.00  in Thaifoods Group Public on December 29, 2024 and sell it today you would earn a total of  132.00  from holding Thaifoods Group Public or generate 41.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Thaifoods Group Public  vs.  Pylon Public

Thaifoods Group Public

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Thaifoods Group Public are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting technical and fundamental indicators, Thaifoods Group disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pylon Public

Risk-Adjusted Performance

Weak

Over the last 90 days Pylon Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Pylon Public is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Thaifoods Group and Pylon Public

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

The idea behind Thaifoods Group Public and Pylon 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.