Correlation Between Ratchthani Leasing and TCM Public

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

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

Diversification Opportunities for Ratchthani Leasing and TCM Public

0.95

Correlation Coefficient

Ratchthani Leasing  TCM Public

Almost no diversification

The 3 months correlation between Ratchthani and TCM is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Ratchthani Leasing Public and TCM Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TCM Public and Ratchthani Leasing 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 Ratchthani Leasing Public are associated (or correlated) with TCM Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TCM Public has no effect on the direction of Ratchthani Leasing i.e., Ratchthani Leasing and TCM Public go up and down completely randomly.

Pair Corralation between Ratchthani Leasing and TCM Public

Assuming the 90 days trading horizon Ratchthani Leasing Public is expected to generate 1.0 times more return on investment than TCM Public. However, Ratchthani Leasing Public is 1.0 times less risky than TCM Public. It trades about 0.12 of its potential returns per unit of risk. TCM Public is currently generating about 0.12 per unit of risk. If you would invest  0.00  in Ratchthani Leasing Public on September 3, 2024 and sell it today you would earn a total of  171.00  from holding Ratchthani Leasing Public or generate 9.223372036854776E16% return on investment over 90 days.

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

Ratchthani Leasing Public  vs.  TCM Public

Ratchthani Leasing Public

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ratchthani Leasing Public are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, Ratchthani Leasing sustained solid returns over the last few months and may actually be approaching a breakup point.

TCM Public

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TCM Public are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, TCM Public disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ratchthani Leasing and TCM Public

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

The idea behind Ratchthani Leasing Public and TCM 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.