Correlation Between TPI Polene and Thai Union

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

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

Diversification Opportunities for TPI Polene and Thai Union

0.66

Correlation Coefficient

TPI Polene  Thai Union

Poor diversification

The 3 months correlation between TPI and Thai is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding TPI Polene Public and Thai Union Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Union Group and TPI Polene 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 TPI Polene Public are associated (or correlated) with Thai Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Union Group has no effect on the direction of TPI Polene i.e., TPI Polene and Thai Union go up and down completely randomly.

Pair Corralation between TPI Polene and Thai Union

Assuming the 90 days trading horizon TPI Polene Public is expected to under-perform the Thai Union. But the stock apears to be less risky and, when comparing its historical volatility, TPI Polene Public is 37.6 times less risky than Thai Union. The stock trades about -0.06 of its potential returns per unit of risk. The Thai Union Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,562  in Thai Union Group on September 17, 2024 and sell it today you would lose (272.00) from holding Thai Union Group or give up 17.41% of portfolio value over 90 days.

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

TPI Polene Public  vs.  Thai Union Group

TPI Polene Public

Risk-Adjusted Performance

0 of 100

Very Weak

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

Thai Union Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thai Union 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 fundamental drivers 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 TPI Polene and Thai Union

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

The idea behind TPI Polene Public and Thai Union 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.

Check out your portfolio center.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.