Correlation Between Bangkok Sheet and TMC Industrial

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

By analyzing existing cross correlation between Bangkok Sheet Metal and TMC Industrial Public, you can compare the effects of market volatilities on Bangkok Sheet and TMC Industrial 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 Bangkok Sheet with a short position of TMC Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Sheet and TMC Industrial.

Diversification Opportunities for Bangkok Sheet and TMC Industrial

-0.19

Correlation Coefficient

Bangkok Sheet  TMC Industrial

Good diversification

The 3 months correlation between Bangkok and TMC is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Sheet Metal and TMC Industrial Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TMC Industrial Public and Bangkok Sheet 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 Bangkok Sheet Metal are associated (or correlated) with TMC Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TMC Industrial Public has no effect on the direction of Bangkok Sheet i.e., Bangkok Sheet and TMC Industrial go up and down completely randomly.

Pair Corralation between Bangkok Sheet and TMC Industrial

Assuming the 90 days horizon Bangkok Sheet is expected to generate 1.06 times less return on investment than TMC Industrial. But when comparing it to its historical volatility, Bangkok Sheet Metal is 5.44 times less risky than TMC Industrial. It trades about 0.14 of its potential returns per unit of risk. TMC Industrial Public is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  110.00  in TMC Industrial Public on September 15, 2024 and sell it today you would earn a total of  2.00  from holding TMC Industrial Public or generate 1.82% return on investment over 90 days.

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

Bangkok Sheet Metal  vs.  TMC Industrial Public

Bangkok Sheet Metal

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bangkok Sheet Metal are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental drivers, Bangkok Sheet may actually be approaching a critical reversion point that can send shares even higher in January 2025.

TMC Industrial Public

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TMC Industrial Public are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental indicators, TMC Industrial may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Bangkok Sheet and TMC Industrial

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

The idea behind Bangkok Sheet Metal and TMC Industrial 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.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.