Correlation Between PEPTONIC MEDICAL and THAI BEVERAGE
Can any of the company-specific risk be diversified away by investing in both PEPTONIC MEDICAL 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 PEPTONIC MEDICAL and THAI BEVERAGE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PEPTONIC MEDICAL and THAI BEVERAGE, you can compare the effects of market volatilities on PEPTONIC MEDICAL 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 PEPTONIC MEDICAL with a short position of THAI BEVERAGE. Check out your portfolio center. Please also check ongoing floating volatility patterns of PEPTONIC MEDICAL and THAI BEVERAGE.
Diversification Opportunities for PEPTONIC MEDICAL and THAI BEVERAGE
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PEPTONIC and THAI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PEPTONIC MEDICAL and THAI BEVERAGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THAI BEVERAGE and PEPTONIC MEDICAL 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 PEPTONIC MEDICAL 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 has no effect on the direction of PEPTONIC MEDICAL i.e., PEPTONIC MEDICAL and THAI BEVERAGE go up and down completely randomly.
Pair Corralation between PEPTONIC MEDICAL and THAI BEVERAGE
Assuming the 90 days horizon PEPTONIC MEDICAL is expected to generate 12.16 times more return on investment than THAI BEVERAGE. However, PEPTONIC MEDICAL is 12.16 times more volatile than THAI BEVERAGE. It trades about 0.06 of its potential returns per unit of risk. THAI BEVERAGE is currently generating about 0.05 per unit of risk. If you would invest 0.46 in PEPTONIC MEDICAL on October 28, 2024 and sell it today you would lose (0.44) from holding PEPTONIC MEDICAL or give up 95.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PEPTONIC MEDICAL vs. THAI BEVERAGE
Performance |
| Timeline |
| PEPTONIC MEDICAL |
| THAI BEVERAGE |
PEPTONIC MEDICAL and THAI BEVERAGE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PEPTONIC MEDICAL and THAI BEVERAGE
The main advantage of trading using opposite PEPTONIC MEDICAL and THAI BEVERAGE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PEPTONIC MEDICAL 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.| PEPTONIC MEDICAL vs. Ares Management Corp | PEPTONIC MEDICAL vs. Coor Service Management | PEPTONIC MEDICAL vs. H2O Retailing | PEPTONIC MEDICAL vs. SALESFORCE INC CDR |
| THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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