Correlation Between Thai Ha and G Capital

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

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

Diversification Opportunities for Thai Ha and G Capital

0.67

Correlation Coefficient

Thai Ha  G Capital

Poor diversification

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

Pair Corralation between Thai Ha and G Capital

Assuming the 90 days trading horizon Thai Ha Public is expected to generate 1.15 times more return on investment than G Capital. However, Thai Ha is 1.15 times more volatile than G Capital Public. It trades about -0.03 of its potential returns per unit of risk. G Capital Public is currently generating about -0.28 per unit of risk. 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

Thai Ha Public  vs.  G Capital Public

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.

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.

Pair Trading with Thai Ha and G Capital

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

The idea behind Thai Ha Public and G Capital 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.