Correlation Between Fuji Media and Thai Beverage
Can any of the company-specific risk be diversified away by investing in both Fuji Media 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 Fuji Media and Thai Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fuji Media Holdings and Thai Beverage Public, you can compare the effects of market volatilities on Fuji Media 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 Fuji Media with a short position of Thai Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuji Media and Thai Beverage.
Diversification Opportunities for Fuji Media and Thai Beverage
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fuji and Thai is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Fuji Media Holdings 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 Fuji Media 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 Fuji Media 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 Fuji Media i.e., Fuji Media and Thai Beverage go up and down completely randomly.
Pair Corralation between Fuji Media and Thai Beverage
Assuming the 90 days trading horizon Fuji Media Holdings is expected to generate 0.76 times more return on investment than Thai Beverage. However, Fuji Media Holdings is 1.31 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 0.04 per unit of risk. If you would invest 990.00 in Fuji Media Holdings on October 26, 2024 and sell it today you would earn a total of 110.00 from holding Fuji Media Holdings or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fuji Media Holdings vs. Thai Beverage Public
Performance |
| Timeline |
| Fuji Media Holdings |
| Thai Beverage Public |
Fuji Media and Thai Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fuji Media and Thai Beverage
The main advantage of trading using opposite Fuji Media and Thai Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fuji Media 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.| Fuji Media vs. PennantPark Investment | Fuji Media vs. Television Broadcasts Limited | Fuji Media vs. Transport International Holdings | Fuji Media vs. CDL INVESTMENT |
| Thai Beverage vs. Diageo plc | Thai Beverage vs. Pernod Ricard SA | Thai Beverage vs. Constellation Brands | Thai Beverage vs. Brown Forman |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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