Correlation Between Thai Mui and Prodigy Public

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

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

Diversification Opportunities for Thai Mui and Prodigy Public

0.24

Correlation Coefficient

Thai Mui  Prodigy Public

Modest diversification

The 3 months correlation between Thai and Prodigy is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Thai Mui and Prodigy Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prodigy Public and Thai Mui 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 Thai Mui are associated (or correlated) with Prodigy Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prodigy Public has no effect on the direction of Thai Mui i.e., Thai Mui and Prodigy Public go up and down completely randomly.

Pair Corralation between Thai Mui and Prodigy Public

Assuming the 90 days trading horizon Thai Mui is expected to under-perform the Prodigy Public. In addition to that, Thai Mui is 2.51 times more volatile than Prodigy Public. It trades about -0.08 of its total potential returns per unit of risk. Prodigy Public is currently generating about 0.07 per unit of volatility. If you would invest  246.00  in Prodigy Public on December 21, 2024 and sell it today you would earn a total of  16.00  from holding Prodigy Public or generate 6.5% return on investment over 90 days.

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

Thai Mui  vs.  Prodigy Public

Thai Mui

Risk-Adjusted Performance

Very Weak

Over the last 90 days Thai Mui 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 April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Prodigy Public

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Prodigy Public are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting technical and fundamental indicators, Prodigy Public may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Thai Mui and Prodigy Public

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

The idea behind Thai Mui and Prodigy 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.

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.