Correlation Between Amgen and THAI BEVERAGE
Can any of the company-specific risk be diversified away by investing in both Amgen 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 Amgen and THAI BEVERAGE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amgen Inc and THAI BEVERAGE, you can compare the effects of market volatilities on Amgen 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 Amgen with a short position of THAI BEVERAGE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amgen and THAI BEVERAGE.
Diversification Opportunities for Amgen and THAI BEVERAGE
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amgen and THAI is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and THAI BEVERAGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THAI BEVERAGE and Amgen 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 Amgen Inc 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 Amgen i.e., Amgen and THAI BEVERAGE go up and down completely randomly.
Pair Corralation between Amgen and THAI BEVERAGE
Assuming the 90 days trading horizon Amgen Inc is expected to under-perform the THAI BEVERAGE. In addition to that, Amgen is 1.41 times more volatile than THAI BEVERAGE. It trades about -0.1 of its total potential returns per unit of risk. THAI BEVERAGE is currently generating about 0.27 per unit of volatility. If you would invest 34.00 in THAI BEVERAGE on September 2, 2024 and sell it today you would earn a total of 5.00 from holding THAI BEVERAGE or generate 14.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amgen Inc vs. THAI BEVERAGE
Performance |
| Timeline |
| Amgen Inc |
| THAI BEVERAGE |
Amgen and THAI BEVERAGE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amgen and THAI BEVERAGE
The main advantage of trading using opposite Amgen and THAI BEVERAGE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amgen 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.The idea behind Amgen Inc and THAI BEVERAGE pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| THAI BEVERAGE vs. SIVERS SEMICONDUCTORS AB | THAI BEVERAGE vs. Darden Restaurants | THAI BEVERAGE vs. Reliance Steel Aluminum | THAI BEVERAGE vs. Q2M Managementberatung 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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