Correlation Between TISCO Financial and Trinity Watthana

Can any of the company-specific risk be diversified away by investing in both TISCO Financial and Trinity Watthana 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 TISCO Financial and Trinity Watthana into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for TISCO Financial and Trinity Watthana

-0.12

Correlation Coefficient

TISCO Financial  Trinity Watthana

Good diversification

The 3 months correlation between TISCO and Trinity is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding TISCO Financial Group and Trinity Watthana Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trinity Watthana Public and TISCO Financial 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 TISCO Financial Group are associated (or correlated) with Trinity Watthana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trinity Watthana Public has no effect on the direction of TISCO Financial i.e., TISCO Financial and Trinity Watthana go up and down completely randomly.

Pair Corralation between TISCO Financial and Trinity Watthana

Assuming the 90 days trading horizon TISCO Financial Group is expected to generate 0.12 times more return on investment than Trinity Watthana. However, TISCO Financial Group is 8.41 times less risky than Trinity Watthana. It trades about 0.19 of its potential returns per unit of risk. Trinity Watthana Public is currently generating about -0.06 per unit of risk. If you would invest  9,625  in TISCO Financial Group on October 11, 2024 and sell it today you would earn a total of  300.00  from holding TISCO Financial Group or generate 3.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.5%
Values	Daily Returns

TISCO Financial Group  vs.  Trinity Watthana Public

TISCO Financial Group

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in TISCO Financial Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, TISCO Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Trinity Watthana Public

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Trinity Watthana Public are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, Trinity Watthana is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with TISCO Financial and Trinity Watthana

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

The idea behind TISCO Financial Group and Trinity Watthana 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.