Correlation Between Thai Mitsuwa and Peerapat Technology

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

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

Diversification Opportunities for Thai Mitsuwa and Peerapat Technology

0.38

Correlation Coefficient

Thai Mitsuwa  Peerapat Technology

Weak diversification

The 3 months correlation between Thai and Peerapat is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Thai Mitsuwa Public and Peerapat Technology Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peerapat Technology and Thai Mitsuwa 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 Mitsuwa Public are associated (or correlated) with Peerapat Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peerapat Technology has no effect on the direction of Thai Mitsuwa i.e., Thai Mitsuwa and Peerapat Technology go up and down completely randomly.

Pair Corralation between Thai Mitsuwa and Peerapat Technology

Assuming the 90 days trading horizon Thai Mitsuwa Public is expected to generate 0.71 times more return on investment than Peerapat Technology. However, Thai Mitsuwa Public is 1.4 times less risky than Peerapat Technology. It trades about -0.09 of its potential returns per unit of risk. Peerapat Technology Public is currently generating about -0.26 per unit of risk. If you would invest  6,300  in Thai Mitsuwa Public on October 5, 2024 and sell it today you would lose (150.00) from holding Thai Mitsuwa Public or give up 2.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	94.74%
Values	Daily Returns

Thai Mitsuwa Public  vs.  Peerapat Technology Public

Thai Mitsuwa Public

Risk-Adjusted Performance

0 of 100

Very Weak

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

Peerapat Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Peerapat Technology Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Thai Mitsuwa and Peerapat Technology

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

The idea behind Thai Mitsuwa Public and Peerapat Technology 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.