Correlation Between Thai Metal and Srisawad Power

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

By analyzing existing cross correlation between Thai Metal Drum and Srisawad Power 1979, you can compare the effects of market volatilities on Thai Metal and Srisawad Power 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 Metal with a short position of Srisawad Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Metal and Srisawad Power.

Diversification Opportunities for Thai Metal and Srisawad Power

-0.18

Correlation Coefficient

Thai Metal  Srisawad Power

Good diversification

The 3 months correlation between Thai and Srisawad is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Thai Metal Drum and Srisawad Power 1979 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Srisawad Power 1979 and Thai Metal 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 Metal Drum are associated (or correlated) with Srisawad Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Srisawad Power 1979 has no effect on the direction of Thai Metal i.e., Thai Metal and Srisawad Power go up and down completely randomly.

Pair Corralation between Thai Metal and Srisawad Power

Assuming the 90 days trading horizon Thai Metal Drum is expected to generate 0.35 times more return on investment than Srisawad Power. However, Thai Metal Drum is 2.88 times less risky than Srisawad Power. It trades about 0.11 of its potential returns per unit of risk. Srisawad Power 1979 is currently generating about -0.16 per unit of risk. If you would invest  2,430  in Thai Metal Drum on April 12, 2024 and sell it today you would earn a total of  50.00  from holding Thai Metal Drum or generate 2.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

Thai Metal Drum  vs.  Srisawad Power 1979

Thai Metal Drum

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Thai Metal Drum are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental indicators, Thai Metal is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Srisawad Power 1979

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Srisawad Power 1979 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Srisawad Power is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Thai Metal and Srisawad Power

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

The idea behind Thai Metal Drum and Srisawad Power 1979 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.