Correlation Between Thai Mui and Panjawattana Plastic

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

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

Diversification Opportunities for Thai Mui and Panjawattana Plastic

0.36

Correlation Coefficient

Thai Mui  Panjawattana Plastic

Weak diversification

The 3 months correlation between Thai and Panjawattana is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Thai Mui and Panjawattana Plastic Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panjawattana Plastic 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 Panjawattana Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panjawattana Plastic has no effect on the direction of Thai Mui i.e., Thai Mui and Panjawattana Plastic go up and down completely randomly.

Pair Corralation between Thai Mui and Panjawattana Plastic

Assuming the 90 days trading horizon Thai Mui is expected to under-perform the Panjawattana Plastic. In addition to that, Thai Mui is 4.97 times more volatile than Panjawattana Plastic Public. It trades about -0.12 of its total potential returns per unit of risk. Panjawattana Plastic Public is currently generating about 0.04 per unit of volatility. If you would invest  226.00  in Panjawattana Plastic Public on December 24, 2024 and sell it today you would earn a total of  4.00  from holding Panjawattana Plastic Public or generate 1.77% 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.  Panjawattana Plastic 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.

Panjawattana Plastic

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Panjawattana Plastic Public are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Panjawattana Plastic 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 Thai Mui and Panjawattana Plastic

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

The idea behind Thai Mui and Panjawattana Plastic 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..