Correlation Between Thantawan Industry and G J

Can any of the company-specific risk be diversified away by investing in both Thantawan Industry and G J 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 G J 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 G J Steel, you can compare the effects of market volatilities on Thantawan Industry and G J 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 G J. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thantawan Industry and G J.

Diversification Opportunities for Thantawan Industry and G J

0.14

Correlation Coefficient

Thantawan Industry  G J

Average diversification

The 3 months correlation between Thantawan and GJS is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Thantawan Industry Public and G J Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G J Steel 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 G J. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G J Steel has no effect on the direction of Thantawan Industry i.e., Thantawan Industry and G J go up and down completely randomly.

Pair Corralation between Thantawan Industry and G J

Assuming the 90 days trading horizon Thantawan Industry Public is expected to under-perform the G J. But the stock apears to be less risky and, when comparing its historical volatility, Thantawan Industry Public is 5.95 times less risky than G J. The stock trades about -0.1 of its potential returns per unit of risk. The G J Steel is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  15.00  in G J Steel on December 27, 2024 and sell it today you would lose (2.00) from holding G J Steel or give up 13.33% of portfolio value over 90 days.

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

Thantawan Industry Public  vs.  G J Steel

Thantawan Industry Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Thantawan Industry Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

G J Steel

Risk-Adjusted Performance

Weak

Over the last 90 days G J Steel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, G J 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 G J

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

The idea behind Thantawan Industry Public and G J Steel 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.