Correlation Between China Resources and Thai Beverage
Can any of the company-specific risk be diversified away by investing in both China Resources 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 China Resources and Thai Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Resources Beer and Thai Beverage Public, you can compare the effects of market volatilities on China Resources 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 China Resources with a short position of Thai Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Resources and Thai Beverage.
Diversification Opportunities for China Resources and Thai Beverage
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Thai is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding China Resources Beer 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 China Resources 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 China Resources Beer 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 China Resources i.e., China Resources and Thai Beverage go up and down completely randomly.
Pair Corralation between China Resources and Thai Beverage
Assuming the 90 days horizon China Resources Beer is expected to under-perform the Thai Beverage. But the stock apears to be less risky and, when comparing its historical volatility, China Resources Beer is 1.65 times less risky than Thai Beverage. The stock trades about -0.05 of its potential returns per unit of risk. The Thai Beverage Public is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 37.00 in Thai Beverage Public on October 25, 2024 and sell it today you would lose (1.00) from holding Thai Beverage Public or give up 2.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Resources Beer vs. Thai Beverage Public
Performance |
| Timeline |
| China Resources Beer |
| Thai Beverage Public |
China Resources and Thai Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Resources and Thai Beverage
The main advantage of trading using opposite China Resources and Thai Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Resources 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.| China Resources vs. Verizon Communications | China Resources vs. National Beverage Corp | China Resources vs. GEELY AUTOMOBILE | China Resources vs. Singapore Telecommunications Limited |
| Thai Beverage vs. DALATA HOTEL | Thai Beverage vs. Park Hotels Resorts | Thai Beverage vs. SBM OFFSHORE | Thai Beverage vs. AIR PRODCHEMICALS |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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