Correlation Between G Capital and Thai Ha

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

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

Diversification Opportunities for G Capital and Thai Ha

0.67

Correlation Coefficient

G Capital  Thai Ha

Poor diversification

The 3 months correlation between GCAP and Thai is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding G Capital Public and Thai Ha Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Ha Public and G Capital 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 G Capital Public are associated (or correlated) with Thai Ha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Ha Public has no effect on the direction of G Capital i.e., G Capital and Thai Ha go up and down completely randomly.

Pair Corralation between G Capital and Thai Ha

Assuming the 90 days trading horizon G Capital Public is expected to under-perform the Thai Ha. But the stock apears to be less risky and, when comparing its historical volatility, G Capital Public is 1.15 times less risky than Thai Ha. The stock trades about -0.28 of its potential returns per unit of risk. The Thai Ha Public is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  105.00  in Thai Ha Public on September 23, 2024 and sell it today you would lose (15.00) from holding Thai Ha Public or give up 14.29% of portfolio value over 90 days.

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

G Capital Public  vs.  Thai Ha Public

G Capital Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days G Capital Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward-looking signals 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 Ha Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thai Ha Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with G Capital and Thai Ha

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

The idea behind G Capital Public and Thai Ha 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.