Correlation Between Thantawan Industry and TEAM Consulting

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

Diversification Opportunities for Thantawan Industry and TEAM Consulting

0.04

Correlation Coefficient

Thantawan Industry  TEAM Consulting

Significant diversification

The 3 months correlation between Thantawan and TEAM is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Thantawan Industry Public and TEAM Consulting Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TEAM Consulting Engi 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 TEAM Consulting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TEAM Consulting Engi has no effect on the direction of Thantawan Industry i.e., Thantawan Industry and TEAM Consulting go up and down completely randomly.

Pair Corralation between Thantawan Industry and TEAM Consulting

Assuming the 90 days trading horizon Thantawan Industry Public is expected to generate 0.29 times more return on investment than TEAM Consulting. However, Thantawan Industry Public is 3.51 times less risky than TEAM Consulting. It trades about -0.04 of its potential returns per unit of risk. TEAM Consulting Engineering is currently generating about -0.03 per unit of risk. If you would invest  2,875  in Thantawan Industry Public on December 1, 2024 and sell it today you would lose (100.00) from holding Thantawan Industry Public or give up 3.48% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Thantawan Industry Public  vs.  TEAM Consulting Engineering

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 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.

TEAM Consulting Engi

Risk-Adjusted Performance

Very Weak

Over the last 90 days TEAM Consulting Engineering has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental drivers 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 Thantawan Industry and TEAM Consulting

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

The idea behind Thantawan Industry Public and TEAM Consulting Engineering 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.