Correlation Between United Hero and ThaiDEX SET

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

By analyzing existing cross correlation between United Hero ETF and ThaiDEX SET High, you can compare the effects of market volatilities on United Hero and ThaiDEX SET 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 United Hero with a short position of ThaiDEX SET. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Hero and ThaiDEX SET.

Diversification Opportunities for United Hero and ThaiDEX SET

-0.12

Correlation Coefficient

United Hero  ThaiDEX SET

Good diversification

The 3 months correlation between United and ThaiDEX is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding United Hero ETF and ThaiDEX SET High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ThaiDEX SET High and United Hero 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 United Hero ETF are associated (or correlated) with ThaiDEX SET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ThaiDEX SET High has no effect on the direction of United Hero i.e., United Hero and ThaiDEX SET go up and down completely randomly.

Pair Corralation between United Hero and ThaiDEX SET

Assuming the 90 days trading horizon United Hero ETF is expected to generate 235.18 times more return on investment than ThaiDEX SET. However, United Hero is 235.18 times more volatile than ThaiDEX SET High. It trades about 0.19 of its potential returns per unit of risk. ThaiDEX SET High is currently generating about 0.08 per unit of risk. If you would invest  745.00  in United Hero ETF on October 4, 2024 and sell it today you would earn a total of  75.00  from holding United Hero ETF or generate 10.07% return on investment over 90 days.

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

United Hero ETF  vs.  ThaiDEX SET High

United Hero ETF

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in United Hero ETF are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, United Hero sustained solid returns over the last few months and may actually be approaching a breakup point.

ThaiDEX SET High

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ThaiDEX SET High has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, ThaiDEX SET is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with United Hero and ThaiDEX SET

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

The idea behind United Hero ETF and ThaiDEX SET High 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.