Correlation Between Thailand Prime and Impact Growth

Can any of the company-specific risk be diversified away by investing in both Thailand Prime and Impact Growth 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 Thailand Prime and Impact Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Thailand Prime Property and Impact Growth REIT, you can compare the effects of market volatilities on Thailand Prime and Impact Growth 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 Thailand Prime with a short position of Impact Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thailand Prime and Impact Growth.

Diversification Opportunities for Thailand Prime and Impact Growth

-0.01

Correlation Coefficient

Thailand Prime  Impact Growth

Good diversification

The 3 months correlation between Thailand and Impact is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Thailand Prime Property and Impact Growth REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impact Growth REIT and Thailand Prime 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 Thailand Prime Property are associated (or correlated) with Impact Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impact Growth REIT has no effect on the direction of Thailand Prime i.e., Thailand Prime and Impact Growth go up and down completely randomly.

Pair Corralation between Thailand Prime and Impact Growth

Assuming the 90 days trading horizon Thailand Prime Property is expected to under-perform the Impact Growth. In addition to that, Thailand Prime is 1.37 times more volatile than Impact Growth REIT. It trades about -0.09 of its total potential returns per unit of risk. Impact Growth REIT is currently generating about -0.07 per unit of volatility. If you would invest  1,100  in Impact Growth REIT on September 28, 2024 and sell it today you would lose (20.00) from holding Impact Growth REIT or give up 1.82% of portfolio value over 90 days.

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

Thailand Prime Property  vs.  Impact Growth REIT

Thailand Prime Property

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Thailand Prime Property are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Thailand Prime is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Impact Growth REIT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Impact Growth REIT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Thailand Prime and Impact Growth

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

The idea behind Thailand Prime Property and Impact Growth REIT 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.