Correlation Between Sumitomo Mitsui and Thai Beverage
Can any of the company-specific risk be diversified away by investing in both Sumitomo Mitsui 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 Sumitomo Mitsui and Thai Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sumitomo Mitsui Construction and Thai Beverage Public, you can compare the effects of market volatilities on Sumitomo Mitsui 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 Sumitomo Mitsui with a short position of Thai Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Mitsui and Thai Beverage.
Diversification Opportunities for Sumitomo Mitsui and Thai Beverage
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sumitomo and Thai is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Mitsui Construction 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 Sumitomo Mitsui 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 Sumitomo Mitsui Construction 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 Sumitomo Mitsui i.e., Sumitomo Mitsui and Thai Beverage go up and down completely randomly.
Pair Corralation between Sumitomo Mitsui and Thai Beverage
Assuming the 90 days horizon Sumitomo Mitsui Construction is expected to under-perform the Thai Beverage. But the stock apears to be less risky and, when comparing its historical volatility, Sumitomo Mitsui Construction is 1.59 times less risky than Thai Beverage. The stock trades about -0.09 of its potential returns per unit of risk. The Thai Beverage Public is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 39.00 in Thai Beverage Public on October 12, 2024 and sell it today you would earn a total of 0.00 from holding Thai Beverage Public or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sumitomo Mitsui Construction vs. Thai Beverage Public
Performance |
| Timeline |
| Sumitomo Mitsui Cons |
| Thai Beverage Public |
Sumitomo Mitsui and Thai Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Mitsui and Thai Beverage
The main advantage of trading using opposite Sumitomo Mitsui and Thai Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Mitsui 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.| Sumitomo Mitsui vs. Q2M Managementberatung AG | Sumitomo Mitsui vs. Hanison Construction Holdings | Sumitomo Mitsui vs. Platinum Investment Management | Sumitomo Mitsui vs. Sims Metal Management |
| Thai Beverage vs. Cleanaway Waste Management | Thai Beverage vs. Sumitomo Mitsui Construction | Thai Beverage vs. Australian Agricultural | Thai Beverage vs. CeoTronics AG |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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