Correlation Between TMC Industrial and Thaicom Public

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

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

Diversification Opportunities for TMC Industrial and Thaicom Public

0.23

Correlation Coefficient

TMC Industrial  Thaicom Public

Modest diversification

The 3 months correlation between TMC and Thaicom is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding TMC Industrial Public and Thaicom Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thaicom Public and TMC Industrial 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 TMC Industrial Public are associated (or correlated) with Thaicom Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thaicom Public has no effect on the direction of TMC Industrial i.e., TMC Industrial and Thaicom Public go up and down completely randomly.

Pair Corralation between TMC Industrial and Thaicom Public

Assuming the 90 days trading horizon TMC Industrial Public is expected to under-perform the Thaicom Public. But the stock apears to be less risky and, when comparing its historical volatility, TMC Industrial Public is 2.08 times less risky than Thaicom Public. The stock trades about -0.2 of its potential returns per unit of risk. The Thaicom Public is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,360  in Thaicom Public on September 15, 2024 and sell it today you would earn a total of  30.00  from holding Thaicom Public or generate 2.21% return on investment over 90 days.

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

TMC Industrial Public  vs.  Thaicom Public

TMC Industrial Public

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TMC Industrial Public are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental indicators, TMC Industrial may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Thaicom Public

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Thaicom Public are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Thaicom Public sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TMC Industrial and Thaicom Public

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

The idea behind TMC Industrial Public and Thaicom 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.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.