Correlation Between KAUFMAN ET and Thai Beverage
Can any of the company-specific risk be diversified away by investing in both KAUFMAN ET 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 KAUFMAN ET and Thai Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KAUFMAN ET BROAD and Thai Beverage Public, you can compare the effects of market volatilities on KAUFMAN ET 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 KAUFMAN ET with a short position of Thai Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of KAUFMAN ET and Thai Beverage.
Diversification Opportunities for KAUFMAN ET and Thai Beverage
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between KAUFMAN and Thai is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding KAUFMAN ET BROAD 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 KAUFMAN ET 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 KAUFMAN ET BROAD 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 KAUFMAN ET i.e., KAUFMAN ET and Thai Beverage go up and down completely randomly.
Pair Corralation between KAUFMAN ET and Thai Beverage
Assuming the 90 days trading horizon KAUFMAN ET BROAD is expected to under-perform the Thai Beverage. But the stock apears to be less risky and, when comparing its historical volatility, KAUFMAN ET BROAD is 2.02 times less risky than Thai Beverage. The stock trades about -0.3 of its potential returns per unit of risk. The Thai Beverage Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 36.00 in Thai Beverage Public on August 31, 2024 and sell it today you would earn a total of 1.00 from holding Thai Beverage Public or generate 2.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KAUFMAN ET BROAD vs. Thai Beverage Public
Performance |
| Timeline |
| KAUFMAN ET BROAD |
| Thai Beverage Public |
KAUFMAN ET and Thai Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KAUFMAN ET and Thai Beverage
The main advantage of trading using opposite KAUFMAN ET and Thai Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KAUFMAN ET 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.| KAUFMAN ET vs. Direct Line Insurance | KAUFMAN ET vs. Zijin Mining Group | KAUFMAN ET vs. Lion One Metals | KAUFMAN ET vs. Japan Post Insurance |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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