Correlation Between Thai German and Thachang Green

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

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

Diversification Opportunities for Thai German and Thachang Green

0.77

Correlation Coefficient

Thai German  Thachang Green

Poor diversification

The 3 months correlation between Thai and Thachang is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Thai German Products Public and Thachang Green Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thachang Green Energy and Thai German 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 German Products Public are associated (or correlated) with Thachang Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thachang Green Energy has no effect on the direction of Thai German i.e., Thai German and Thachang Green go up and down completely randomly.

Pair Corralation between Thai German and Thachang Green

Assuming the 90 days trading horizon Thai German Products Public is expected to generate 2.85 times more return on investment than Thachang Green. However, Thai German is 2.85 times more volatile than Thachang Green Energy. It trades about -0.02 of its potential returns per unit of risk. Thachang Green Energy is currently generating about -0.17 per unit of risk. If you would invest  9.00  in Thai German Products Public on December 2, 2024 and sell it today you would lose (2.00) from holding Thai German Products Public or give up 22.22% of portfolio value over 90 days.

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

Thai German Products Public  vs.  Thachang Green Energy

Thai German Products

Risk-Adjusted Performance

Very Weak

Over the last 90 days Thai German Products Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Thachang Green Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Thachang Green Energy 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 technical and 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 Thai German and Thachang Green

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

The idea behind Thai German Products Public and Thachang Green Energy 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.