Correlation Between Thai Nippon and Moong Pattana

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

By analyzing existing cross correlation between Thai Nippon Rubber and Moong Pattana International, you can compare the effects of market volatilities on Thai Nippon and Moong Pattana 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 Thai Nippon with a short position of Moong Pattana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Nippon and Moong Pattana.

Diversification Opportunities for Thai Nippon and Moong Pattana

-0.11

Correlation Coefficient

Thai Nippon  Moong Pattana

Good diversification

The 3 months correlation between Thai and Moong is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Thai Nippon Rubber and Moong Pattana International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moong Pattana Intern and Thai Nippon 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 Thai Nippon Rubber are associated (or correlated) with Moong Pattana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moong Pattana Intern has no effect on the direction of Thai Nippon i.e., Thai Nippon and Moong Pattana go up and down completely randomly.

Pair Corralation between Thai Nippon and Moong Pattana

Assuming the 90 days trading horizon Thai Nippon Rubber is expected to generate 0.72 times more return on investment than Moong Pattana. However, Thai Nippon Rubber is 1.4 times less risky than Moong Pattana. It trades about 0.19 of its potential returns per unit of risk. Moong Pattana International is currently generating about 0.05 per unit of risk. If you would invest  935.00  in Thai Nippon Rubber on February 4, 2024 and sell it today you would earn a total of  30.00  from holding Thai Nippon Rubber or generate 3.21% return on investment over 90 days.

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

Thai Nippon Rubber  vs.  Moong Pattana International

Thai Nippon Rubber

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Thai Nippon Rubber are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Thai Nippon may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Moong Pattana Intern

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Moong Pattana International are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting technical and fundamental indicators, Moong Pattana may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Thai Nippon and Moong Pattana

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

The idea behind Thai Nippon Rubber and Moong Pattana International 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.