Correlation Between Meta Platforms and Thai Union

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Can any of the company-specific risk be diversified away by investing in both Meta Platforms 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 Meta Platforms and Thai Union into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meta Platforms and Thai Union Group, you can compare the effects of market volatilities on Meta Platforms 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 Meta Platforms with a short position of Thai Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meta Platforms and Thai Union.

Diversification Opportunities for Meta Platforms and Thai Union

0.27
  Correlation Coefficient

Modest diversification

The 3 months correlation between Meta and Thai is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Meta Platforms 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 Meta Platforms 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 Meta Platforms 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 Meta Platforms i.e., Meta Platforms and Thai Union go up and down completely randomly.

Pair Corralation between Meta Platforms and Thai Union

Allowing for the 90-day total investment horizon Meta Platforms is expected to under-perform the Thai Union. In addition to that, Meta Platforms is 3.05 times more volatile than Thai Union Group. It trades about -0.09 of its total potential returns per unit of risk. Thai Union Group is currently generating about -0.01 per unit of volatility. If you would invest  1,610  in Thai Union Group on December 29, 2023 and sell it today you would lose (170.00) from holding Thai Union Group or give up 10.56% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy11.46%
ValuesDaily Returns

Meta Platforms  vs.  Thai Union Group

 Performance 
       Timeline  
Meta Platforms 

Risk-Adjusted Performance

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High
Very Weak
Over the last 90 days Meta Platforms has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Meta Platforms is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.
Thai Union Group 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
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 current stock price mess, may contribute to short-term losses for the institutional investors.

Meta Platforms and Thai Union Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Meta Platforms and Thai Union

The main advantage of trading using opposite Meta Platforms and Thai Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meta Platforms 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 Meta Platforms 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.
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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