Correlation Between Peoples Garment and Thai Union
Can any of the company-specific risk be diversified away by investing in both Peoples Garment 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 Peoples Garment and Thai Union into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Peoples Garment Public and Thai Union Group, you can compare the effects of market volatilities on Peoples Garment 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 Peoples Garment with a short position of Thai Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peoples Garment and Thai Union.
Diversification Opportunities for Peoples Garment and Thai Union
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Peoples and Thai is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Peoples Garment Public 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 Peoples Garment 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 Peoples Garment Public 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 Peoples Garment i.e., Peoples Garment and Thai Union go up and down completely randomly.
Pair Corralation between Peoples Garment and Thai Union
Assuming the 90 days horizon Peoples Garment Public is expected to under-perform the Thai Union. But the stock apears to be less risky and, when comparing its historical volatility, Peoples Garment Public is 1.19 times less risky than Thai Union. The stock trades about -0.02 of its potential returns per unit of risk. The Thai Union Group is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,470 in Thai Union Group on February 2, 2024 and sell it today you would earn a total of 0.00 from holding Thai Union Group or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Peoples Garment Public vs. Thai Union Group
Performance |
Timeline |
Peoples Garment Public |
Thai Union Group |
Peoples Garment and Thai Union Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Peoples Garment and Thai Union
The main advantage of trading using opposite Peoples Garment and Thai Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peoples Garment 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.Peoples Garment vs. CP ALL Public | Peoples Garment vs. Bangkok Dusit Medical | Peoples Garment vs. Gulf Energy Development |
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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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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