Correlation Between Stellar and TMBThanachart Bank

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

By analyzing existing cross correlation between Stellar and TMBThanachart Bank PCL, you can compare the effects of market volatilities on Stellar and TMBThanachart Bank 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 Stellar with a short position of TMBThanachart Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stellar and TMBThanachart Bank.

Diversification Opportunities for Stellar and TMBThanachart Bank

-0.27

Correlation Coefficient

Stellar  TMBThanachart Bank

Very good diversification

The 3 months correlation between Stellar and TMBThanachart is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Stellar and TMBThanachart Bank PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TMBThanachart Bank PCL and Stellar 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 Stellar are associated (or correlated) with TMBThanachart Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TMBThanachart Bank PCL has no effect on the direction of Stellar i.e., Stellar and TMBThanachart Bank go up and down completely randomly.

Pair Corralation between Stellar and TMBThanachart Bank

Assuming the 90 days trading horizon Stellar is expected to generate 7.54 times more return on investment than TMBThanachart Bank. However, Stellar is 7.54 times more volatile than TMBThanachart Bank PCL. It trades about 0.26 of its potential returns per unit of risk. TMBThanachart Bank PCL is currently generating about 0.03 per unit of risk. If you would invest  9.01  in Stellar on October 9, 2024 and sell it today you would earn a total of  34.99  from holding Stellar or generate 388.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	92.19%
Values	Daily Returns

Stellar  vs.  TMBThanachart Bank PCL

Stellar

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Stellar are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady primary indicators, Stellar exhibited solid returns over the last few months and may actually be approaching a breakup point.

TMBThanachart Bank PCL

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TMBThanachart Bank PCL are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, TMBThanachart Bank is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Stellar and TMBThanachart Bank

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

The idea behind Stellar and TMBThanachart Bank PCL 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.