Correlation Between True Public and Thaicom Public

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

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

Diversification Opportunities for True Public and Thaicom Public

0.38

Correlation Coefficient

True Public  Thaicom Public

Weak diversification

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

Pair Corralation between True Public and Thaicom Public

Assuming the 90 days trading horizon True Public is expected to generate 0.53 times more return on investment than Thaicom Public. However, True Public is 1.89 times less risky than Thaicom Public. It trades about 0.12 of its potential returns per unit of risk. Thaicom Public is currently generating about 0.06 per unit of risk. If you would invest  1,050  in True Public on September 16, 2024 and sell it today you would earn a total of  130.00  from holding True Public or generate 12.38% return on investment over 90 days.

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

True Public  vs.  Thaicom Public

True Public

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in True Public are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward-looking signals, True Public disclosed solid returns over the last few months and may actually be approaching a breakup point.

Thaicom Public

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Thaicom Public are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Thaicom Public may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with True Public and Thaicom Public

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

The idea behind True Public and Thaicom 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.

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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.