Correlation Between Global Ship and THAI BEVERAGE
Can any of the company-specific risk be diversified away by investing in both Global Ship 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 Global Ship and THAI BEVERAGE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Ship Lease and THAI BEVERAGE, you can compare the effects of market volatilities on Global Ship 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 Global Ship with a short position of THAI BEVERAGE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and THAI BEVERAGE.
Diversification Opportunities for Global Ship and THAI BEVERAGE
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Global and THAI is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and THAI BEVERAGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THAI BEVERAGE and Global Ship 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 Global Ship Lease 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 Global Ship i.e., Global Ship and THAI BEVERAGE go up and down completely randomly.
Pair Corralation between Global Ship and THAI BEVERAGE
Assuming the 90 days horizon Global Ship Lease is expected to generate 0.75 times more return on investment than THAI BEVERAGE. However, Global Ship Lease is 1.33 times less risky than THAI BEVERAGE. It trades about 0.07 of its potential returns per unit of risk. THAI BEVERAGE is currently generating about 0.01 per unit of risk. If you would invest 2,169 in Global Ship Lease on August 25, 2024 and sell it today you would earn a total of 55.00 from holding Global Ship Lease or generate 2.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Ship Lease vs. THAI BEVERAGE
Performance |
| Timeline |
| Global Ship Lease |
| THAI BEVERAGE |
Global Ship and THAI BEVERAGE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Ship and THAI BEVERAGE
The main advantage of trading using opposite Global Ship and THAI BEVERAGE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Ship 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.| Global Ship vs. Superior Plus Corp | Global Ship vs. NMI Holdings | Global Ship vs. Origin Agritech | Global Ship vs. SIVERS SEMICONDUCTORS AB |
| THAI BEVERAGE vs. TYSON FOODS A | THAI BEVERAGE vs. AUSTEVOLL SEAFOOD | THAI BEVERAGE vs. DIVERSIFIED ROYALTY | THAI BEVERAGE vs. SWISS WATER DECAFFCOFFEE |
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 Stocks Directory module to find actively traded stocks across global markets.
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