Correlation Between Vibhavadi Medical and Thai Nam

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

By analyzing existing cross correlation between Vibhavadi Medical Center and Thai Nam Plastic, you can compare the effects of market volatilities on Vibhavadi Medical and Thai Nam 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 Vibhavadi Medical with a short position of Thai Nam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vibhavadi Medical and Thai Nam.

Diversification Opportunities for Vibhavadi Medical and Thai Nam

-0.35

Correlation Coefficient

Vibhavadi Medical  Thai Nam

Very good diversification

The 3 months correlation between Vibhavadi and Thai is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Vibhavadi Medical Center and Thai Nam Plastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Nam Plastic and Vibhavadi Medical 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 Vibhavadi Medical Center are associated (or correlated) with Thai Nam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Nam Plastic has no effect on the direction of Vibhavadi Medical i.e., Vibhavadi Medical and Thai Nam go up and down completely randomly.

Pair Corralation between Vibhavadi Medical and Thai Nam

Assuming the 90 days trading horizon Vibhavadi Medical Center is expected to generate 1.04 times more return on investment than Thai Nam. However, Vibhavadi Medical is 1.04 times more volatile than Thai Nam Plastic. It trades about -0.14 of its potential returns per unit of risk. Thai Nam Plastic is currently generating about -0.26 per unit of risk. If you would invest  208.00  in Vibhavadi Medical Center on October 7, 2024 and sell it today you would lose (9.00) from holding Vibhavadi Medical Center or give up 4.33% of portfolio value over 90 days.

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

Vibhavadi Medical Center  vs.  Thai Nam Plastic

Vibhavadi Medical Center

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vibhavadi Medical Center are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, Vibhavadi Medical is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Thai Nam Plastic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thai Nam Plastic 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 forward-looking signals remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Vibhavadi Medical and Thai Nam

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

The idea behind Vibhavadi Medical Center and Thai Nam Plastic 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.