Correlation Between Thai Packaging and Thantawan Industry

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

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

Diversification Opportunities for Thai Packaging and Thantawan Industry

-0.1

Correlation Coefficient

Thai Packaging  Thantawan Industry

Good diversification

The 3 months correlation between Thai and Thantawan is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Thai Packaging Printing and Thantawan Industry Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thantawan Industry Public and Thai Packaging 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 Packaging Printing are associated (or correlated) with Thantawan Industry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thantawan Industry Public has no effect on the direction of Thai Packaging i.e., Thai Packaging and Thantawan Industry go up and down completely randomly.

Pair Corralation between Thai Packaging and Thantawan Industry

Assuming the 90 days trading horizon Thai Packaging Printing is expected to generate 2.3 times more return on investment than Thantawan Industry. However, Thai Packaging is 2.3 times more volatile than Thantawan Industry Public. It trades about 0.04 of its potential returns per unit of risk. Thantawan Industry Public is currently generating about -0.1 per unit of risk. If you would invest  1,169  in Thai Packaging Printing on December 28, 2024 and sell it today you would earn a total of  51.00  from holding Thai Packaging Printing or generate 4.36% return on investment over 90 days.

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

Thai Packaging Printing  vs.  Thantawan Industry Public

Thai Packaging Printing

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Thai Packaging Printing are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Thai Packaging may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Thantawan Industry Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Thantawan Industry Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Thai Packaging and Thantawan Industry

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

The idea behind Thai Packaging Printing and Thantawan Industry 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 Anywhere module to track or share privately all of your investments from the convenience of any device.