Correlation Between Impact Growth and Thailand Prime

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

By analyzing existing cross correlation between Impact Growth REIT and Thailand Prime Property, you can compare the effects of market volatilities on Impact Growth and Thailand Prime 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 Impact Growth with a short position of Thailand Prime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impact Growth and Thailand Prime.

Diversification Opportunities for Impact Growth and Thailand Prime

-0.15

Correlation Coefficient

Impact Growth  Thailand Prime

Good diversification

The 3 months correlation between Impact and Thailand is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Impact Growth REIT and Thailand Prime Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thailand Prime Property and Impact Growth 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 Impact Growth REIT are associated (or correlated) with Thailand Prime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thailand Prime Property has no effect on the direction of Impact Growth i.e., Impact Growth and Thailand Prime go up and down completely randomly.

Pair Corralation between Impact Growth and Thailand Prime

Assuming the 90 days trading horizon Impact Growth REIT is expected to under-perform the Thailand Prime. But the stock apears to be less risky and, when comparing its historical volatility, Impact Growth REIT is 1.58 times less risky than Thailand Prime. The stock trades about -0.05 of its potential returns per unit of risk. The Thailand Prime Property is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  716.00  in Thailand Prime Property on September 26, 2024 and sell it today you would earn a total of  34.00  from holding Thailand Prime Property or generate 4.75% return on investment over 90 days.

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

Impact Growth REIT  vs.  Thailand Prime Property

Impact Growth REIT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Impact Growth REIT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Thailand Prime Property

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thailand Prime Property has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Thailand Prime is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Impact Growth and Thailand Prime

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

The idea behind Impact Growth REIT and Thailand Prime Property 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.