Correlation Between Thantawan Industry and STPI Public

Can any of the company-specific risk be diversified away by investing in both Thantawan Industry and STPI Public 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 Thantawan Industry and STPI Public into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Thantawan Industry and STPI Public

0.5

Correlation Coefficient

Thantawan Industry  STPI Public

Very weak diversification

The 3 months correlation between Thantawan and STPI is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Thantawan Industry Public and STPI Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STPI Public and Thantawan Industry 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 Thantawan Industry Public are associated (or correlated) with STPI Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STPI Public has no effect on the direction of Thantawan Industry i.e., Thantawan Industry and STPI Public go up and down completely randomly.

Pair Corralation between Thantawan Industry and STPI Public

Assuming the 90 days trading horizon Thantawan Industry Public is expected to generate 0.35 times more return on investment than STPI Public. However, Thantawan Industry Public is 2.87 times less risky than STPI Public. It trades about 0.04 of its potential returns per unit of risk. STPI Public is currently generating about -0.09 per unit of risk. If you would invest  2,850  in Thantawan Industry Public on September 17, 2024 and sell it today you would earn a total of  50.00  from holding Thantawan Industry Public or generate 1.75% return on investment over 90 days.

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

Thantawan Industry Public  vs.  STPI Public

Thantawan Industry Public

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Thantawan Industry Public are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Thantawan Industry is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

STPI Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days STPI Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Thantawan Industry and STPI Public

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

The idea behind Thantawan Industry Public and STPI 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.