Correlation Between Thai Solar and TPC Power
Can any of the company-specific risk be diversified away by investing in both Thai Solar and TPC Power 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 Thai Solar and TPC Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thai Solar Energy and TPC Power Holding, you can compare the effects of market volatilities on Thai Solar and TPC Power 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 Thai Solar with a short position of TPC Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Solar and TPC Power.
Diversification Opportunities for Thai Solar and TPC Power
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Thai and TPC is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Thai Solar Energy and TPC Power Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TPC Power Holding and Thai Solar 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 Thai Solar Energy are associated (or correlated) with TPC Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TPC Power Holding has no effect on the direction of Thai Solar i.e., Thai Solar and TPC Power go up and down completely randomly.
Pair Corralation between Thai Solar and TPC Power
Assuming the 90 days trading horizon Thai Solar Energy is expected to generate 23.44 times more return on investment than TPC Power. However, Thai Solar is 23.44 times more volatile than TPC Power Holding. It trades about 0.04 of its potential returns per unit of risk. TPC Power Holding is currently generating about -0.02 per unit of risk. If you would invest 225.00 in Thai Solar Energy on September 25, 2024 and sell it today you would lose (136.00) from holding Thai Solar Energy or give up 60.44% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 99.79% |
Values | Daily Returns |
Thai Solar Energy vs. TPC Power Holding
Performance |
Timeline |
Thai Solar Energy |
TPC Power Holding |
Thai Solar and TPC Power Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Thai Solar and TPC Power
The main advantage of trading using opposite Thai Solar and TPC Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Solar position performs unexpectedly, TPC Power 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 TPC Power will offset losses from the drop in TPC Power's long position.Thai Solar vs. Gulf Energy Development | Thai Solar vs. Energy Absolute Public | Thai Solar vs. Gunkul Engineering Public | Thai Solar vs. Global Power Synergy |
TPC Power vs. WHA Public | TPC Power vs. Energy Absolute Public | TPC Power vs. TPI Polene Public | TPC Power vs. Thai Solar Energy |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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