Correlation Between Thai Union and B 52

Can any of the company-specific risk be diversified away by investing in both Thai Union and B 52 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 Union and B 52 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Thai Union Group and B 52 Capital Public, you can compare the effects of market volatilities on Thai Union and B 52 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 Union with a short position of B 52. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Union and B 52.

Diversification Opportunities for Thai Union and B 52

-0.44

Correlation Coefficient

Thai Union  B 52

Very good diversification

The 3 months correlation between Thai and B52 is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Thai Union Group and B 52 Capital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on B 52 Capital and Thai Union 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 Union Group are associated (or correlated) with B 52. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of B 52 Capital has no effect on the direction of Thai Union i.e., Thai Union and B 52 go up and down completely randomly.

Pair Corralation between Thai Union and B 52

Assuming the 90 days trading horizon Thai Union Group is expected to generate 18.39 times more return on investment than B 52. However, Thai Union is 18.39 times more volatile than B 52 Capital Public. It trades about 0.11 of its potential returns per unit of risk. B 52 Capital Public is currently generating about -0.06 per unit of risk. If you would invest  1,301  in Thai Union Group on September 29, 2024 and sell it today you would lose (1.00) from holding Thai Union Group or give up 0.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Thai Union Group  vs.  B 52 Capital Public

Thai Union Group

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Thai Union Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward-looking signals, Thai Union disclosed solid returns over the last few months and may actually be approaching a breakup point.

B 52 Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days B 52 Capital 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 basic indicators 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 Thai Union and B 52

The main advantage of trading using opposite Thai Union and B 52 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Union position performs unexpectedly, B 52 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 B 52 will offset losses from the drop in B 52's long position.

The idea behind Thai Union Group and B 52 Capital 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .