Correlation Between Thaicom Public and Intouch Holdings

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

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

Diversification Opportunities for Thaicom Public and Intouch Holdings

0.63

Correlation Coefficient

Thaicom Public  Intouch Holdings

Poor diversification

The 3 months correlation between Thaicom and Intouch is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Thaicom Public and Intouch Holdings Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intouch Holdings Public 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 Intouch Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intouch Holdings Public has no effect on the direction of Thaicom Public i.e., Thaicom Public and Intouch Holdings go up and down completely randomly.

Pair Corralation between Thaicom Public and Intouch Holdings

Assuming the 90 days trading horizon Thaicom Public is expected to under-perform the Intouch Holdings. In addition to that, Thaicom Public is 1.41 times more volatile than Intouch Holdings Public. It trades about -0.16 of its total potential returns per unit of risk. Intouch Holdings Public is currently generating about -0.08 per unit of volatility. If you would invest  11,200  in Intouch Holdings Public on October 20, 2024 and sell it today you would lose (1,150) from holding Intouch Holdings Public or give up 10.27% of portfolio value over 90 days.

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

Thaicom Public  vs.  Intouch Holdings Public

Thaicom Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thaicom Public 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 drivers remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Intouch Holdings Public

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Thaicom Public and Intouch Holdings

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

The idea behind Thaicom Public and Intouch Holdings 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.