Correlation Between Visa and Thaicom Public

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

By analyzing existing cross correlation between Visa Class A and Thaicom Public, you can compare the effects of market volatilities on Visa and Thaicom Public 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 Visa with a short position of Thaicom Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Thaicom Public.

Diversification Opportunities for Visa and Thaicom Public

0.6

Correlation Coefficient

Visa  Thaicom Public

Poor diversification

The 3 months correlation between Visa and Thaicom is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Thaicom Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thaicom Public and Visa 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 Visa Class A are associated (or correlated) with Thaicom Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thaicom Public has no effect on the direction of Visa i.e., Visa and Thaicom Public go up and down completely randomly.

Pair Corralation between Visa and Thaicom Public

Taking into account the 90-day investment horizon Visa is expected to generate 68.59 times less return on investment than Thaicom Public. But when comparing it to its historical volatility, Visa Class A is 63.2 times less risky than Thaicom Public. It trades about 0.06 of its potential returns per unit of risk. Thaicom Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,238  in Thaicom Public on October 22, 2024 and sell it today you would lose (58.00) from holding Thaicom Public or give up 4.68% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.61%
Values	Daily Returns

Visa Class A  vs.  Thaicom Public

Visa Class A

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Visa may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Thaicom Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thaicom Public has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Thaicom Public is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Visa and Thaicom Public

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

The idea behind Visa Class A and Thaicom 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.