Correlation Between Thai Mui and Project Planning

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

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

Diversification Opportunities for Thai Mui and Project Planning

0.71

Correlation Coefficient

Thai Mui  Project Planning

Poor diversification

The 3 months correlation between Thai and Project is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Thai Mui and Project Planning Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Project Planning Service 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 Project Planning. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Project Planning Service has no effect on the direction of Thai Mui i.e., Thai Mui and Project Planning go up and down completely randomly.

Pair Corralation between Thai Mui and Project Planning

Assuming the 90 days trading horizon Thai Mui is expected to generate 0.82 times more return on investment than Project Planning. However, Thai Mui is 1.22 times less risky than Project Planning. It trades about -0.12 of its potential returns per unit of risk. Project Planning Service is currently generating about -0.1 per unit of risk. If you would invest  59.00  in Thai Mui on October 26, 2024 and sell it today you would lose (15.00) from holding Thai Mui or give up 25.42% of portfolio value over 90 days.

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

Thai Mui  vs.  Project Planning Service

Thai Mui

Risk-Adjusted Performance

0 of 100

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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Project Planning Service

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Project Planning Service 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 basic indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Thai Mui and Project Planning

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

The idea behind Thai Mui and Project Planning Service 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.