Correlation Between Techno Medical and Thai Mui

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

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

Diversification Opportunities for Techno Medical and Thai Mui

0.86

Correlation Coefficient

Techno Medical  Thai Mui

Very poor diversification

The 3 months correlation between Techno and Thai is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Techno Medical Public and Thai Mui in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Mui and Techno Medical 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 Techno Medical Public are associated (or correlated) with Thai Mui. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Mui has no effect on the direction of Techno Medical i.e., Techno Medical and Thai Mui go up and down completely randomly.

Pair Corralation between Techno Medical and Thai Mui

Assuming the 90 days horizon Techno Medical Public is expected to under-perform the Thai Mui. But the stock apears to be less risky and, when comparing its historical volatility, Techno Medical Public is 1.33 times less risky than Thai Mui. The stock trades about -0.25 of its potential returns per unit of risk. The Thai Mui is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest  51.00  in Thai Mui on December 22, 2024 and sell it today you would lose (16.00) from holding Thai Mui or give up 31.37% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.41%
Values	Daily Returns

Techno Medical Public  vs.  Thai Mui

Techno Medical Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Techno Medical Public 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 quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

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.

Pair Trading with Techno Medical and Thai Mui

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

The idea behind Techno Medical Public and Thai Mui 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.