Correlation Between CARYSIL and Thai Union

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

By analyzing existing cross correlation between CARYSIL LIMITED and Thai Union Group, you can compare the effects of market volatilities on CARYSIL and Thai Union 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 CARYSIL with a short position of Thai Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of CARYSIL and Thai Union.

Diversification Opportunities for CARYSIL and Thai Union

0.26

Correlation Coefficient

CARYSIL  Thai Union

Modest diversification

The 3 months correlation between CARYSIL and Thai is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding CARYSIL LIMITED and Thai Union Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Union Group and CARYSIL 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 CARYSIL LIMITED are associated (or correlated) with Thai Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Union Group has no effect on the direction of CARYSIL i.e., CARYSIL and Thai Union go up and down completely randomly.

Pair Corralation between CARYSIL and Thai Union

Assuming the 90 days trading horizon CARYSIL LIMITED is expected to under-perform the Thai Union. In addition to that, CARYSIL is 1.36 times more volatile than Thai Union Group. It trades about -0.2 of its total potential returns per unit of risk. Thai Union Group is currently generating about 0.1 per unit of volatility. If you would invest  1,460  in Thai Union Group on February 4, 2024 and sell it today you would earn a total of  30.00  from holding Thai Union Group or generate 2.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	89.47%
Values	Daily Returns

CARYSIL LIMITED  vs.  Thai Union Group

CARYSIL LIMITED

Risk-Adjusted Performance

0 of 100

Very Weak

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

Thai Union Group

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with CARYSIL and Thai Union

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

The idea behind CARYSIL LIMITED and Thai Union Group 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.