Correlation Between TMBThanachart Bank and Traton SE

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

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

Diversification Opportunities for TMBThanachart Bank and Traton SE

0.59

Correlation Coefficient

TMBThanachart Bank  Traton SE

Very weak diversification

The 3 months correlation between TMBThanachart and Traton is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding TMBThanachart Bank Public and Traton SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Traton SE and TMBThanachart Bank 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 TMBThanachart Bank Public are associated (or correlated) with Traton SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Traton SE has no effect on the direction of TMBThanachart Bank i.e., TMBThanachart Bank and Traton SE go up and down completely randomly.

Pair Corralation between TMBThanachart Bank and Traton SE

Assuming the 90 days trading horizon TMBThanachart Bank is expected to generate 1.83 times less return on investment than Traton SE. In addition to that, TMBThanachart Bank is 1.04 times more volatile than Traton SE. It trades about 0.09 of its total potential returns per unit of risk. Traton SE is currently generating about 0.17 per unit of volatility. If you would invest  2,623  in Traton SE on April 24, 2025 and sell it today you would earn a total of  637.00  from holding Traton SE or generate 24.29% return on investment over 90 days.

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

TMBThanachart Bank Public  vs.  Traton SE

TMBThanachart Bank Public

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in TMBThanachart Bank Public are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, TMBThanachart Bank may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Traton SE

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Traton SE are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Traton SE reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TMBThanachart Bank and Traton SE

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

The idea behind TMBThanachart Bank Public and Traton SE 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.