Correlation Between Consolidated Communications and Thai Beverage
Can any of the company-specific risk be diversified away by investing in both Consolidated Communications 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 Consolidated Communications and Thai Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Consolidated Communications Holdings and Thai Beverage Public, you can compare the effects of market volatilities on Consolidated Communications 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 Consolidated Communications with a short position of Thai Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consolidated Communications and Thai Beverage.
Diversification Opportunities for Consolidated Communications and Thai Beverage
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Consolidated and Thai is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Consolidated Communications Ho 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 Consolidated Communications 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 Consolidated Communications Holdings 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 Consolidated Communications i.e., Consolidated Communications and Thai Beverage go up and down completely randomly.
Pair Corralation between Consolidated Communications and Thai Beverage
Assuming the 90 days horizon Consolidated Communications is expected to generate 2.05 times less return on investment than Thai Beverage. But when comparing it to its historical volatility, Consolidated Communications Holdings is 3.48 times less risky than Thai Beverage. It trades about 0.08 of its potential returns per unit of risk. Thai Beverage Public is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 33.00 in Thai Beverage Public on September 1, 2024 and sell it today you would earn a total of 5.00 from holding Thai Beverage Public or generate 15.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Consolidated Communications Ho vs. Thai Beverage Public
Performance |
| Timeline |
| Consolidated Communications |
| Thai Beverage Public |
Consolidated Communications and Thai Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Consolidated Communications and Thai Beverage
The main advantage of trading using opposite Consolidated Communications and Thai Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consolidated Communications 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.| Consolidated Communications vs. SPORTING | Consolidated Communications vs. TITANIUM TRANSPORTGROUP | Consolidated Communications vs. SCIENCE IN SPORT | Consolidated Communications vs. ANTA SPORTS PRODUCT |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |