Correlation Between Heng Leasing and Muang Thai

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

By analyzing existing cross correlation between Heng Leasing Capital and Muang Thai Insurance, you can compare the effects of market volatilities on Heng Leasing and Muang Thai 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 Heng Leasing with a short position of Muang Thai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heng Leasing and Muang Thai.

Diversification Opportunities for Heng Leasing and Muang Thai

-0.81

Correlation Coefficient

Heng Leasing  Muang Thai

Pay attention - limited upside

The 3 months correlation between Heng and Muang is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Heng Leasing Capital and Muang Thai Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Muang Thai Insurance and Heng Leasing 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 Heng Leasing Capital are associated (or correlated) with Muang Thai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Muang Thai Insurance has no effect on the direction of Heng Leasing i.e., Heng Leasing and Muang Thai go up and down completely randomly.

Pair Corralation between Heng Leasing and Muang Thai

Assuming the 90 days trading horizon Heng Leasing Capital is expected to under-perform the Muang Thai. But the stock apears to be less risky and, when comparing its historical volatility, Heng Leasing Capital is 1.52 times less risky than Muang Thai. The stock trades about -0.05 of its potential returns per unit of risk. The Muang Thai Insurance is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  1,080  in Muang Thai Insurance on April 24, 2025 and sell it today you would earn a total of  500.00  from holding Muang Thai Insurance or generate 46.3% return on investment over 90 days.

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

Heng Leasing Capital  vs.  Muang Thai Insurance

Heng Leasing Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Heng Leasing Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Heng Leasing is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Muang Thai Insurance

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Muang Thai Insurance are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain forward indicators, Muang Thai disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Heng Leasing and Muang Thai

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

The idea behind Heng Leasing Capital and Muang Thai Insurance 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.