Correlation Between SVI Public and Thaicom Public

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

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

Diversification Opportunities for SVI Public and Thaicom Public

0.22

Correlation Coefficient

SVI Public  Thaicom Public

Modest diversification

The 3 months correlation between SVI and Thaicom is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding SVI Public and Thaicom Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thaicom Public and SVI Public 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 SVI Public are associated (or correlated) with Thaicom Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thaicom Public has no effect on the direction of SVI Public i.e., SVI Public and Thaicom Public go up and down completely randomly.

Pair Corralation between SVI Public and Thaicom Public

Assuming the 90 days trading horizon SVI Public is expected to generate 1.23 times more return on investment than Thaicom Public. However, SVI Public is 1.23 times more volatile than Thaicom Public. It trades about 0.04 of its potential returns per unit of risk. Thaicom Public is currently generating about 0.05 per unit of risk. If you would invest  735.00  in SVI Public on September 15, 2024 and sell it today you would earn a total of  15.00  from holding SVI Public or generate 2.04% return on investment over 90 days.

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

SVI Public  vs.  Thaicom Public

SVI Public

Risk-Adjusted Performance

0 of 100

Very Weak

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

Thaicom Public

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Thaicom Public are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Thaicom Public sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SVI Public and Thaicom Public

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

The idea behind SVI Public and Thaicom Public 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.