Correlation Between TTCL Public and Thai Capital
Can any of the company-specific risk be diversified away by investing in both TTCL Public and Thai Capital 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 TTCL Public and Thai Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TTCL Public and Thai Capital, you can compare the effects of market volatilities on TTCL Public and Thai Capital 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 TTCL Public with a short position of Thai Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of TTCL Public and Thai Capital.
Diversification Opportunities for TTCL Public and Thai Capital
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TTCL and Thai is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding TTCL Public and Thai Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Capital and TTCL 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 TTCL Public are associated (or correlated) with Thai Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Capital has no effect on the direction of TTCL Public i.e., TTCL Public and Thai Capital go up and down completely randomly.
Pair Corralation between TTCL Public and Thai Capital
Assuming the 90 days trading horizon TTCL Public is expected to under-perform the Thai Capital. But the stock apears to be less risky and, when comparing its historical volatility, TTCL Public is 1.28 times less risky than Thai Capital. The stock trades about -0.3 of its potential returns per unit of risk. The Thai Capital is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest 40.00 in Thai Capital on December 28, 2024 and sell it today you would lose (12.00) from holding Thai Capital or give up 30.0% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
TTCL Public vs. Thai Capital
Performance |
Timeline |
TTCL Public |
Thai Capital |
TTCL Public and Thai Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with TTCL Public and Thai Capital
The main advantage of trading using opposite TTCL Public and Thai Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TTCL Public position performs unexpectedly, Thai Capital 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 Capital will offset losses from the drop in Thai Capital's long position.TTCL Public vs. STPI Public | TTCL Public vs. WHA Public | TTCL Public vs. Italian Thai Development Public | TTCL Public vs. Jasmine International Public |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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