Correlation Between DALATA HOTEL and THAI BEVERAGE
Can any of the company-specific risk be diversified away by investing in both DALATA HOTEL 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 DALATA HOTEL and THAI BEVERAGE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DALATA HOTEL and THAI BEVERAGE, you can compare the effects of market volatilities on DALATA HOTEL 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 DALATA HOTEL with a short position of THAI BEVERAGE. Check out your portfolio center. Please also check ongoing floating volatility patterns of DALATA HOTEL and THAI BEVERAGE.
Diversification Opportunities for DALATA HOTEL and THAI BEVERAGE
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between DALATA and THAI is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding DALATA HOTEL and THAI BEVERAGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THAI BEVERAGE and DALATA HOTEL 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 DALATA HOTEL 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 DALATA HOTEL i.e., DALATA HOTEL and THAI BEVERAGE go up and down completely randomly.
Pair Corralation between DALATA HOTEL and THAI BEVERAGE
Assuming the 90 days trading horizon DALATA HOTEL is expected to generate 1.27 times less return on investment than THAI BEVERAGE. In addition to that, DALATA HOTEL is 1.03 times more volatile than THAI BEVERAGE. It trades about 0.03 of its total potential returns per unit of risk. THAI BEVERAGE is currently generating about 0.04 per unit of volatility. If you would invest 25.00 in THAI BEVERAGE on November 27, 2024 and sell it today you would earn a total of 11.00 from holding THAI BEVERAGE or generate 44.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DALATA HOTEL vs. THAI BEVERAGE
Performance |
| Timeline |
| DALATA HOTEL |
| THAI BEVERAGE |
DALATA HOTEL and THAI BEVERAGE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DALATA HOTEL and THAI BEVERAGE
The main advantage of trading using opposite DALATA HOTEL and THAI BEVERAGE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DALATA HOTEL 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.| DALATA HOTEL vs. Easy Software AG | DALATA HOTEL vs. Infrastrutture Wireless Italiane | DALATA HOTEL vs. Cognizant Technology Solutions | DALATA HOTEL vs. Firan Technology Group |
| THAI BEVERAGE vs. China Foods Limited | THAI BEVERAGE vs. Datang International Power | THAI BEVERAGE vs. Thai Beverage Public | THAI BEVERAGE vs. CanSino Biologics |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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