Correlation Between Hua Hong and Thai Beverage
Can any of the company-specific risk be diversified away by investing in both Hua Hong and Thai Beverage 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 Hua Hong and Thai Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hua Hong Semiconductor and Thai Beverage Public, you can compare the effects of market volatilities on Hua Hong and Thai Beverage 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 Hua Hong with a short position of Thai Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hua Hong and Thai Beverage.
Diversification Opportunities for Hua Hong and Thai Beverage
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hua and Thai is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Hua Hong Semiconductor and Thai Beverage Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Beverage Public and Hua Hong 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 Hua Hong Semiconductor are associated (or correlated) with Thai Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Beverage Public has no effect on the direction of Hua Hong i.e., Hua Hong and Thai Beverage go up and down completely randomly.
Pair Corralation between Hua Hong and Thai Beverage
Assuming the 90 days horizon Hua Hong Semiconductor is expected to generate 0.71 times more return on investment than Thai Beverage. However, Hua Hong Semiconductor is 1.41 times less risky than Thai Beverage. It trades about 0.17 of its potential returns per unit of risk. Thai Beverage Public is currently generating about 0.02 per unit of risk. If you would invest 244.00 in Hua Hong Semiconductor on October 17, 2024 and sell it today you would earn a total of 24.00 from holding Hua Hong Semiconductor or generate 9.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Hua Hong Semiconductor vs. Thai Beverage Public
Performance |
| Timeline |
| Hua Hong Semiconductor |
| Thai Beverage Public |
Hua Hong and Thai Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hua Hong and Thai Beverage
The main advantage of trading using opposite Hua Hong and Thai Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hua Hong position performs unexpectedly, Thai Beverage 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 Beverage will offset losses from the drop in Thai Beverage's long position.| Hua Hong vs. YATRA ONLINE DL 0001 | Hua Hong vs. AOI Electronics Co | Hua Hong vs. SIEM OFFSHORE NEW | Hua Hong vs. ELECTRONIC ARTS |
| Thai Beverage vs. CHINA EDUCATION GROUP | Thai Beverage vs. MagnaChip Semiconductor Corp | Thai Beverage vs. Hua Hong Semiconductor | Thai Beverage vs. STRAYER EDUCATION |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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