Correlation Between United States and TMBThanachart Bank

Can any of the company-specific risk be diversified away by investing in both United States and TMBThanachart Bank 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 United States and TMBThanachart Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for United States and TMBThanachart Bank

-0.66

Correlation Coefficient

United States  TMBThanachart Bank

Excellent diversification

The 3 months correlation between United and TMBThanachart is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding United States Steel and TMBThanachart Bank Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TMBThanachart Bank Public and United States 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 United States Steel are associated (or correlated) with TMBThanachart Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TMBThanachart Bank Public has no effect on the direction of United States i.e., United States and TMBThanachart Bank go up and down completely randomly.

Pair Corralation between United States and TMBThanachart Bank

Assuming the 90 days trading horizon United States Steel is expected to under-perform the TMBThanachart Bank. In addition to that, United States is 1.38 times more volatile than TMBThanachart Bank Public. It trades about -0.08 of its total potential returns per unit of risk. TMBThanachart Bank Public is currently generating about -0.05 per unit of volatility. If you would invest  5.15  in TMBThanachart Bank Public on September 23, 2024 and sell it today you would lose (0.35) from holding TMBThanachart Bank Public or give up 6.8% of portfolio value over 90 days.

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

United States Steel  vs.  TMBThanachart Bank Public

United States Steel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days United States Steel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

TMBThanachart Bank Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TMBThanachart Bank Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, TMBThanachart Bank is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with United States and TMBThanachart Bank

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

The idea behind United States Steel and TMBThanachart Bank 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.