Correlation Between Thoresen Thai and Ratchthani Leasing

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

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

Diversification Opportunities for Thoresen Thai and Ratchthani Leasing

0.22

Correlation Coefficient

Thoresen Thai  Ratchthani Leasing

Modest diversification

The 3 months correlation between Thoresen and Ratchthani is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Thoresen Thai Agencies and Ratchthani Leasing Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ratchthani Leasing Public and Thoresen Thai 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 Thoresen Thai Agencies are associated (or correlated) with Ratchthani Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ratchthani Leasing Public has no effect on the direction of Thoresen Thai i.e., Thoresen Thai and Ratchthani Leasing go up and down completely randomly.

Pair Corralation between Thoresen Thai and Ratchthani Leasing

Assuming the 90 days trading horizon Thoresen Thai Agencies is expected to generate 1.17 times more return on investment than Ratchthani Leasing. However, Thoresen Thai is 1.17 times more volatile than Ratchthani Leasing Public. It trades about 0.0 of its potential returns per unit of risk. Ratchthani Leasing Public is currently generating about -0.2 per unit of risk. If you would invest  585.00  in Thoresen Thai Agencies on September 17, 2024 and sell it today you would lose (15.00) from holding Thoresen Thai Agencies or give up 2.56% of portfolio value over 90 days.

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

Thoresen Thai Agencies  vs.  Ratchthani Leasing Public

Thoresen Thai Agencies

Risk-Adjusted Performance

0 of 100

Very Weak

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

Ratchthani Leasing Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ratchthani Leasing Public 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 somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Thoresen Thai and Ratchthani Leasing

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

The idea behind Thoresen Thai Agencies and Ratchthani Leasing 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.