Correlation Between XSpring Capital and TMBThanachart Bank

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

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

Diversification Opportunities for XSpring Capital and TMBThanachart Bank

0.65

Correlation Coefficient

XSpring Capital  TMBThanachart Bank

Poor diversification

The 3 months correlation between XSpring and TMBThanachart is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding XSpring Capital Public 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 XSpring Capital 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 XSpring Capital Public 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 XSpring Capital i.e., XSpring Capital and TMBThanachart Bank go up and down completely randomly.

Pair Corralation between XSpring Capital and TMBThanachart Bank

Assuming the 90 days trading horizon XSpring Capital Public is expected to under-perform the TMBThanachart Bank. In addition to that, XSpring Capital is 2.14 times more volatile than TMBThanachart Bank Public. It trades about -0.01 of its total potential returns per unit of risk. TMBThanachart Bank Public is currently generating about -0.01 per unit of volatility. If you would invest  181.00  in TMBThanachart Bank Public on September 5, 2024 and sell it today you would lose (2.00) from holding TMBThanachart Bank Public or give up 1.1% of portfolio value over 90 days.

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

XSpring Capital Public  vs.  TMBThanachart Bank Public

XSpring Capital Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days XSpring Capital Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, XSpring Capital is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

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 quite persistent fundamental drivers, TMBThanachart Bank is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with XSpring Capital and TMBThanachart Bank

The main advantage of trading using opposite XSpring Capital and TMBThanachart Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XSpring Capital 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 XSpring Capital Public 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.