Correlation Between TPI POLENE and Chonburi Concrete

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

By analyzing existing cross correlation between TPI POLENE POWER and Chonburi Concrete Product, you can compare the effects of market volatilities on TPI POLENE and Chonburi Concrete 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 TPI POLENE with a short position of Chonburi Concrete. Check out your portfolio center. Please also check ongoing floating volatility patterns of TPI POLENE and Chonburi Concrete.

Diversification Opportunities for TPI POLENE and Chonburi Concrete

-0.64

Correlation Coefficient

TPI POLENE  Chonburi Concrete

Excellent diversification

The 3 months correlation between TPI and Chonburi is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding TPI POLENE POWER and Chonburi Concrete Product in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chonburi Concrete Product and TPI POLENE 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 TPI POLENE POWER are associated (or correlated) with Chonburi Concrete. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chonburi Concrete Product has no effect on the direction of TPI POLENE i.e., TPI POLENE and Chonburi Concrete go up and down completely randomly.

Pair Corralation between TPI POLENE and Chonburi Concrete

Assuming the 90 days trading horizon TPI POLENE POWER is expected to generate 0.04 times more return on investment than Chonburi Concrete. However, TPI POLENE POWER is 22.93 times less risky than Chonburi Concrete. It trades about -0.24 of its potential returns per unit of risk. Chonburi Concrete Product is currently generating about -0.19 per unit of risk. If you would invest  331.00  in TPI POLENE POWER on January 30, 2024 and sell it today you would lose (1.00) from holding TPI POLENE POWER or give up 0.3% of portfolio value over 90 days.

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

TPI POLENE POWER  vs.  Chonburi Concrete Product

TPI POLENE POWER

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TPI POLENE POWER are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, TPI POLENE is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Chonburi Concrete Product

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chonburi Concrete Product has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in May 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with TPI POLENE and Chonburi Concrete

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

The idea behind TPI POLENE POWER and Chonburi Concrete Product 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 Stocks Directory module to find actively traded stocks across global markets.