Correlation Between Australian Agricultural and Thai Beverage
Can any of the company-specific risk be diversified away by investing in both Australian Agricultural 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 Australian Agricultural and Thai Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Australian Agricultural and Thai Beverage Public, you can compare the effects of market volatilities on Australian Agricultural 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 Australian Agricultural with a short position of Thai Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Australian Agricultural and Thai Beverage.
Diversification Opportunities for Australian Agricultural and Thai Beverage
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Australian and Thai is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Australian Agricultural 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 Australian Agricultural 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 Australian Agricultural 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 Australian Agricultural i.e., Australian Agricultural and Thai Beverage go up and down completely randomly.
Pair Corralation between Australian Agricultural and Thai Beverage
Assuming the 90 days horizon Australian Agricultural is expected to under-perform the Thai Beverage. But the stock apears to be less risky and, when comparing its historical volatility, Australian Agricultural is 2.88 times less risky than Thai Beverage. The stock trades about -0.02 of its potential returns per unit of risk. The Thai Beverage Public is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 16.00 in Thai Beverage Public on October 27, 2024 and sell it today you would earn a total of 21.00 from holding Thai Beverage Public or generate 131.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Australian Agricultural vs. Thai Beverage Public
Performance |
| Timeline |
| Australian Agricultural |
| Thai Beverage Public |
Australian Agricultural and Thai Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Australian Agricultural and Thai Beverage
The main advantage of trading using opposite Australian Agricultural and Thai Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Australian Agricultural 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.| Australian Agricultural vs. ANTA SPORTS PRODUCT | Australian Agricultural vs. GEAR4MUSIC LS 10 | Australian Agricultural vs. UNIVERSAL MUSIC GROUP | Australian Agricultural vs. PLAYMATES TOYS |
| Thai Beverage vs. Diageo plc | Thai Beverage vs. Pernod Ricard SA | Thai Beverage vs. Constellation Brands | Thai Beverage vs. Brown Forman |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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