Correlation Between Thaicom Public and Thai President

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

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

Diversification Opportunities for Thaicom Public and Thai President

-0.06

Correlation Coefficient

Thaicom Public  Thai President

Good diversification

The 3 months correlation between Thaicom and Thai is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Thaicom Public and Thai President Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai President Foods and Thaicom 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 Thaicom Public are associated (or correlated) with Thai President. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai President Foods has no effect on the direction of Thaicom Public i.e., Thaicom Public and Thai President go up and down completely randomly.

Pair Corralation between Thaicom Public and Thai President

Assuming the 90 days trading horizon Thaicom Public is expected to generate 1.92 times more return on investment than Thai President. However, Thaicom Public is 1.92 times more volatile than Thai President Foods. It trades about 0.22 of its potential returns per unit of risk. Thai President Foods is currently generating about 0.07 per unit of risk. If you would invest  1,238  in Thaicom Public on September 12, 2024 and sell it today you would earn a total of  202.00  from holding Thaicom Public or generate 16.32% return on investment over 90 days.

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

Thaicom Public  vs.  Thai President Foods

Thaicom Public

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Thaicom Public are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Thaicom Public reported solid returns over the last few months and may actually be approaching a breakup point.

Thai President Foods

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Thai President Foods are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong primary indicators, Thai President is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Thaicom Public and Thai President

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

The idea behind Thaicom Public and Thai President Foods 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.