Correlation Between TMC Industrial and PINTHONG INDUSTRIAL

Can any of the company-specific risk be diversified away by investing in both TMC Industrial and PINTHONG INDUSTRIAL 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 TMC Industrial and PINTHONG INDUSTRIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TMC Industrial Public and PINTHONG INDUSTRIAL PARK, you can compare the effects of market volatilities on TMC Industrial and PINTHONG INDUSTRIAL 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 TMC Industrial with a short position of PINTHONG INDUSTRIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of TMC Industrial and PINTHONG INDUSTRIAL.

Diversification Opportunities for TMC Industrial and PINTHONG INDUSTRIAL

0.05

Correlation Coefficient

TMC Industrial  PINTHONG INDUSTRIAL

Significant diversification

The 3 months correlation between TMC and PINTHONG is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding TMC Industrial Public and PINTHONG INDUSTRIAL PARK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PINTHONG INDUSTRIAL PARK and TMC Industrial 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 TMC Industrial Public are associated (or correlated) with PINTHONG INDUSTRIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PINTHONG INDUSTRIAL PARK has no effect on the direction of TMC Industrial i.e., TMC Industrial and PINTHONG INDUSTRIAL go up and down completely randomly.

Pair Corralation between TMC Industrial and PINTHONG INDUSTRIAL

Assuming the 90 days trading horizon TMC Industrial is expected to generate 3.09 times less return on investment than PINTHONG INDUSTRIAL. In addition to that, TMC Industrial is 1.33 times more volatile than PINTHONG INDUSTRIAL PARK. It trades about 0.03 of its total potential returns per unit of risk. PINTHONG INDUSTRIAL PARK is currently generating about 0.11 per unit of volatility. If you would invest  520.00  in PINTHONG INDUSTRIAL PARK on September 16, 2024 and sell it today you would earn a total of  120.00  from holding PINTHONG INDUSTRIAL PARK or generate 23.08% return on investment over 90 days.

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

TMC Industrial Public  vs.  PINTHONG INDUSTRIAL PARK

TMC Industrial Public

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TMC Industrial Public are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental indicators, TMC Industrial may actually be approaching a critical reversion point that can send shares even higher in January 2025.

PINTHONG INDUSTRIAL PARK

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PINTHONG INDUSTRIAL PARK are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, PINTHONG INDUSTRIAL disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TMC Industrial and PINTHONG INDUSTRIAL

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

The idea behind TMC Industrial Public and PINTHONG INDUSTRIAL PARK 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.