Correlation Between Trinity Watthana and UOB Kay

Can any of the company-specific risk be diversified away by investing in both Trinity Watthana and UOB Kay 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 Trinity Watthana and UOB Kay into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Trinity Watthana and UOB Kay

0.39

Correlation Coefficient

Trinity Watthana  UOB Kay

Weak diversification

The 3 months correlation between Trinity and UOB is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Trinity Watthana Public and UOB Kay Hian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UOB Kay Hian and Trinity Watthana 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 Trinity Watthana Public are associated (or correlated) with UOB Kay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UOB Kay Hian has no effect on the direction of Trinity Watthana i.e., Trinity Watthana and UOB Kay go up and down completely randomly.

Pair Corralation between Trinity Watthana and UOB Kay

Assuming the 90 days trading horizon Trinity Watthana Public is expected to under-perform the UOB Kay. In addition to that, Trinity Watthana is 2.32 times more volatile than UOB Kay Hian. It trades about -0.03 of its total potential returns per unit of risk. UOB Kay Hian is currently generating about 0.01 per unit of volatility. If you would invest  530.00  in UOB Kay Hian on September 24, 2024 and sell it today you would earn a total of  0.00  from holding UOB Kay Hian or generate 0.0% return on investment over 90 days.

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

Trinity Watthana Public  vs.  UOB Kay Hian

Trinity Watthana Public

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Trinity Watthana Public are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Trinity Watthana may actually be approaching a critical reversion point that can send shares even higher in January 2025.

UOB Kay Hian

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Trinity Watthana and UOB Kay

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

The idea behind Trinity Watthana Public and UOB Kay Hian 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.