Correlation Between FIT Hon and Thai Beverage
Can any of the company-specific risk be diversified away by investing in both FIT Hon 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 FIT Hon and Thai Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FIT Hon Teng and Thai Beverage Public, you can compare the effects of market volatilities on FIT Hon 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 FIT Hon with a short position of Thai Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIT Hon and Thai Beverage.
Diversification Opportunities for FIT Hon and Thai Beverage
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between FIT and Thai is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding FIT Hon Teng 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 FIT Hon 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 FIT Hon Teng 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 FIT Hon i.e., FIT Hon and Thai Beverage go up and down completely randomly.
Pair Corralation between FIT Hon and Thai Beverage
Assuming the 90 days horizon FIT Hon Teng is expected to generate 1.49 times more return on investment than Thai Beverage. However, FIT Hon is 1.49 times more volatile than Thai Beverage Public. It trades about 0.05 of its potential returns per unit of risk. Thai Beverage Public is currently generating about 0.02 per unit of risk. If you would invest 30.00 in FIT Hon Teng on August 27, 2024 and sell it today you would earn a total of 12.00 from holding FIT Hon Teng or generate 40.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.04% |
| Values | Daily Returns |
FIT Hon Teng vs. Thai Beverage Public
Performance |
| Timeline |
| FIT Hon Teng |
| Thai Beverage Public |
FIT Hon and Thai Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIT Hon and Thai Beverage
The main advantage of trading using opposite FIT Hon and Thai Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIT Hon 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.| FIT Hon vs. KULR Technology Group | FIT Hon vs. Ouster Inc | FIT Hon vs. MicroCloud Hologram | FIT Hon vs. Kopin |
| Thai Beverage vs. Diageo PLC ADR | Thai Beverage vs. Constellation Brands Class | Thai Beverage vs. Morningstar Unconstrained Allocation | Thai Beverage vs. SEI Investments |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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