Correlation Between Thantawan Industry and Chonburi Concrete

Can any of the company-specific risk be diversified away by investing in both Thantawan Industry and Chonburi Concrete 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 Thantawan Industry and Chonburi Concrete into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Thantawan Industry and Chonburi Concrete

0.52

Correlation Coefficient

Thantawan Industry  Chonburi Concrete

Very weak diversification

The 3 months correlation between Thantawan and Chonburi is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Thantawan Industry Public and Chonburi Concrete Product in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chonburi Concrete Product and Thantawan Industry 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 Thantawan Industry Public are associated (or correlated) with Chonburi Concrete. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chonburi Concrete Product has no effect on the direction of Thantawan Industry i.e., Thantawan Industry and Chonburi Concrete go up and down completely randomly.

Pair Corralation between Thantawan Industry and Chonburi Concrete

Assuming the 90 days trading horizon Thantawan Industry Public is expected to generate 0.33 times more return on investment than Chonburi Concrete. However, Thantawan Industry Public is 3.03 times less risky than Chonburi Concrete. It trades about 0.04 of its potential returns per unit of risk. Chonburi Concrete Product is currently generating about -0.04 per unit of risk. If you would invest  2,850  in Thantawan Industry Public on September 15, 2024 and sell it today you would earn a total of  50.00  from holding Thantawan Industry Public or generate 1.75% return on investment over 90 days.

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

Thantawan Industry Public  vs.  Chonburi Concrete Product

Thantawan Industry Public

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Thantawan Industry Public are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Thantawan Industry is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Chonburi Concrete Product

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chonburi Concrete Product has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Chonburi Concrete is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Thantawan Industry and Chonburi Concrete

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

The idea behind Thantawan Industry Public and Chonburi Concrete Product 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.