Correlation Between Chunghwa Telecom and THAI BEVERAGE
Can any of the company-specific risk be diversified away by investing in both Chunghwa Telecom 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 Chunghwa Telecom and THAI BEVERAGE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chunghwa Telecom Co and THAI BEVERAGE, you can compare the effects of market volatilities on Chunghwa Telecom 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 Chunghwa Telecom with a short position of THAI BEVERAGE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chunghwa Telecom and THAI BEVERAGE.
Diversification Opportunities for Chunghwa Telecom and THAI BEVERAGE
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Chunghwa and THAI is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Chunghwa Telecom Co and THAI BEVERAGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THAI BEVERAGE and Chunghwa Telecom 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 Chunghwa Telecom Co 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 Chunghwa Telecom i.e., Chunghwa Telecom and THAI BEVERAGE go up and down completely randomly.
Pair Corralation between Chunghwa Telecom and THAI BEVERAGE
Assuming the 90 days trading horizon Chunghwa Telecom is expected to generate 14.92 times less return on investment than THAI BEVERAGE. But when comparing it to its historical volatility, Chunghwa Telecom Co is 6.29 times less risky than THAI BEVERAGE. It trades about 0.04 of its potential returns per unit of risk. THAI BEVERAGE is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 18.00 in THAI BEVERAGE on September 3, 2024 and sell it today you would earn a total of 21.00 from holding THAI BEVERAGE or generate 116.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chunghwa Telecom Co vs. THAI BEVERAGE
Performance |
| Timeline |
| Chunghwa Telecom |
| THAI BEVERAGE |
Chunghwa Telecom and THAI BEVERAGE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chunghwa Telecom and THAI BEVERAGE
The main advantage of trading using opposite Chunghwa Telecom and THAI BEVERAGE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chunghwa Telecom 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.| Chunghwa Telecom vs. INTERSHOP Communications Aktiengesellschaft | Chunghwa Telecom vs. Aozora Bank | Chunghwa Telecom vs. Solstad Offshore ASA | Chunghwa Telecom vs. BANKINTER ADR 2007 |
| THAI BEVERAGE vs. Ramsay Health Care | THAI BEVERAGE vs. National Health Investors | THAI BEVERAGE vs. Air Transport Services | THAI BEVERAGE vs. Texas Roadhouse |
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
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |