Correlation Between Ratchthani Leasing and Thai Group
Can any of the company-specific risk be diversified away by investing in both Ratchthani Leasing and Thai Group 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 Ratchthani Leasing and Thai Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ratchthani Leasing Public and Thai Group Holdings, you can compare the effects of market volatilities on Ratchthani Leasing and Thai Group 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 Ratchthani Leasing with a short position of Thai Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ratchthani Leasing and Thai Group.
Diversification Opportunities for Ratchthani Leasing and Thai Group
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ratchthani and Thai is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Ratchthani Leasing Public and Thai Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Group Holdings and Ratchthani Leasing 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 Ratchthani Leasing Public are associated (or correlated) with Thai Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Group Holdings has no effect on the direction of Ratchthani Leasing i.e., Ratchthani Leasing and Thai Group go up and down completely randomly.
Pair Corralation between Ratchthani Leasing and Thai Group
Assuming the 90 days trading horizon Ratchthani Leasing Public is expected to under-perform the Thai Group. But the stock apears to be less risky and, when comparing its historical volatility, Ratchthani Leasing Public is 1.4 times less risky than Thai Group. The stock trades about -0.25 of its potential returns per unit of risk. The Thai Group Holdings is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,210 in Thai Group Holdings on September 25, 2024 and sell it today you would earn a total of 90.00 from holding Thai Group Holdings or generate 7.44% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 95.0% |
Values | Daily Returns |
Ratchthani Leasing Public vs. Thai Group Holdings
Performance |
Timeline |
Ratchthani Leasing Public |
Thai Group Holdings |
Ratchthani Leasing and Thai Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ratchthani Leasing and Thai Group
The main advantage of trading using opposite Ratchthani Leasing and Thai Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ratchthani Leasing position performs unexpectedly, Thai Group 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 Group will offset losses from the drop in Thai Group's long position.Ratchthani Leasing vs. Kasikornbank Public | Ratchthani Leasing vs. PTT Public | Ratchthani Leasing vs. The Siam Cement |
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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