Correlation Between TKrungthai Industries and Well Graded

Can any of the company-specific risk be diversified away by investing in both TKrungthai Industries and Well Graded 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 TKrungthai Industries and Well Graded into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for TKrungthai Industries and Well Graded

0.08

Correlation Coefficient

TKrungthai Industries  Well Graded

Significant diversification

The 3 months correlation between TKrungthai and Well is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding TKrungthai Industries Public and Well Graded Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Well Graded Engineering and TKrungthai Industries 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 TKrungthai Industries Public are associated (or correlated) with Well Graded. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Well Graded Engineering has no effect on the direction of TKrungthai Industries i.e., TKrungthai Industries and Well Graded go up and down completely randomly.

Pair Corralation between TKrungthai Industries and Well Graded

Assuming the 90 days trading horizon TKrungthai Industries Public is expected to generate 0.71 times more return on investment than Well Graded. However, TKrungthai Industries Public is 1.4 times less risky than Well Graded. It trades about -0.04 of its potential returns per unit of risk. Well Graded Engineering is currently generating about -0.07 per unit of risk. If you would invest  173.00  in TKrungthai Industries Public on September 4, 2024 and sell it today you would lose (10.00) from holding TKrungthai Industries Public or give up 5.78% of portfolio value over 90 days.

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

TKrungthai Industries Public  vs.  Well Graded Engineering

TKrungthai Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TKrungthai Industries Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, TKrungthai Industries is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Well Graded Engineering

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Well Graded Engineering has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with TKrungthai Industries and Well Graded

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

The idea behind TKrungthai Industries Public and Well Graded 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.