Correlation Between Thai Union and Srinanaporn Marketing

Can any of the company-specific risk be diversified away by investing in both Thai Union and Srinanaporn Marketing 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 Srinanaporn Marketing 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 Srinanaporn Marketing Public, you can compare the effects of market volatilities on Thai Union and Srinanaporn Marketing 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 Srinanaporn Marketing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Union and Srinanaporn Marketing.

Diversification Opportunities for Thai Union and Srinanaporn Marketing

0.76

Correlation Coefficient

Thai Union  Srinanaporn Marketing

Poor diversification

The 3 months correlation between Thai and Srinanaporn is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Thai Union Group and Srinanaporn Marketing Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Srinanaporn Marketing 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 Srinanaporn Marketing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Srinanaporn Marketing has no effect on the direction of Thai Union i.e., Thai Union and Srinanaporn Marketing go up and down completely randomly.

Pair Corralation between Thai Union and Srinanaporn Marketing

Assuming the 90 days horizon Thai Union Group is expected to under-perform the Srinanaporn Marketing. But the stock apears to be less risky and, when comparing its historical volatility, Thai Union Group is 1.54 times less risky than Srinanaporn Marketing. The stock trades about -0.19 of its potential returns per unit of risk. The Srinanaporn Marketing Public is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest  1,370  in Srinanaporn Marketing Public on September 14, 2024 and sell it today you would lose (180.00) from holding Srinanaporn Marketing Public or give up 13.14% of portfolio value over 90 days.

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

Thai Union Group  vs.  Srinanaporn Marketing Public

Thai Union Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thai Union Group 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 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.

Srinanaporn Marketing

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Srinanaporn Marketing Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward-looking signals 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 Srinanaporn Marketing

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

The idea behind Thai Union Group and Srinanaporn Marketing 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.