Correlation Between Wyncoast Industrial and Thai Coating

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

By analyzing existing cross correlation between Wyncoast Industrial Park and Thai Coating Industrial, you can compare the effects of market volatilities on Wyncoast Industrial and Thai Coating 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 Wyncoast Industrial with a short position of Thai Coating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wyncoast Industrial and Thai Coating.

Diversification Opportunities for Wyncoast Industrial and Thai Coating

-0.14

Correlation Coefficient

Wyncoast Industrial  Thai Coating

Good diversification

The 3 months correlation between Wyncoast and Thai is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Wyncoast Industrial Park and Thai Coating Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Coating Industrial and Wyncoast Industrial 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 Wyncoast Industrial Park are associated (or correlated) with Thai Coating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Coating Industrial has no effect on the direction of Wyncoast Industrial i.e., Wyncoast Industrial and Thai Coating go up and down completely randomly.

Pair Corralation between Wyncoast Industrial and Thai Coating

Assuming the 90 days trading horizon Wyncoast Industrial Park is expected to under-perform the Thai Coating. But the stock apears to be less risky and, when comparing its historical volatility, Wyncoast Industrial Park is 2.27 times less risky than Thai Coating. The stock trades about -0.06 of its potential returns per unit of risk. The Thai Coating Industrial is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  2,500  in Thai Coating Industrial on September 24, 2024 and sell it today you would earn a total of  150.00  from holding Thai Coating Industrial or generate 6.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

Wyncoast Industrial Park  vs.  Thai Coating Industrial

Wyncoast Industrial Park

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wyncoast Industrial Park 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.

Thai Coating Industrial

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Thai Coating Industrial are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, Thai Coating sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wyncoast Industrial and Thai Coating

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

The idea behind Wyncoast Industrial Park and Thai Coating Industrial 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.

Check out your portfolio center.

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.