Correlation Between Thai Nam and Tycoons Worldwide

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

By analyzing existing cross correlation between Thai Nam Plastic and Tycoons Worldwide Group, you can compare the effects of market volatilities on Thai Nam and Tycoons Worldwide 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 Nam with a short position of Tycoons Worldwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Nam and Tycoons Worldwide.

Diversification Opportunities for Thai Nam and Tycoons Worldwide

0.94

Correlation Coefficient

Thai Nam  Tycoons Worldwide

Almost no diversification

The 3 months correlation between Thai and Tycoons is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Thai Nam Plastic and Tycoons Worldwide Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tycoons Worldwide and Thai Nam 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 Nam Plastic are associated (or correlated) with Tycoons Worldwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tycoons Worldwide has no effect on the direction of Thai Nam i.e., Thai Nam and Tycoons Worldwide go up and down completely randomly.

Pair Corralation between Thai Nam and Tycoons Worldwide

Assuming the 90 days trading horizon Thai Nam Plastic is expected to under-perform the Tycoons Worldwide. In addition to that, Thai Nam is 1.69 times more volatile than Tycoons Worldwide Group. It trades about -0.26 of its total potential returns per unit of risk. Tycoons Worldwide Group is currently generating about -0.23 per unit of volatility. If you would invest  199.00  in Tycoons Worldwide Group on October 7, 2024 and sell it today you would lose (8.00) from holding Tycoons Worldwide Group or give up 4.02% of portfolio value over 90 days.

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

Thai Nam Plastic  vs.  Tycoons Worldwide Group

Thai Nam Plastic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thai Nam Plastic 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 forward-looking signals remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Tycoons Worldwide

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tycoons Worldwide Group 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 forward-looking signals remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Thai Nam and Tycoons Worldwide

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

The idea behind Thai Nam Plastic and Tycoons Worldwide Group 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.