Correlation Between ENGIE ADR1 and THAI BEVERAGE
Can any of the company-specific risk be diversified away by investing in both ENGIE ADR1 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 ENGIE ADR1 and THAI BEVERAGE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ENGIE ADR1 EO and THAI BEVERAGE, you can compare the effects of market volatilities on ENGIE ADR1 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 ENGIE ADR1 with a short position of THAI BEVERAGE. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENGIE ADR1 and THAI BEVERAGE.
Diversification Opportunities for ENGIE ADR1 and THAI BEVERAGE
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ENGIE and THAI is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding ENGIE ADR1 EO and THAI BEVERAGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THAI BEVERAGE and ENGIE ADR1 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 ENGIE ADR1 EO 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 ENGIE ADR1 i.e., ENGIE ADR1 and THAI BEVERAGE go up and down completely randomly.
Pair Corralation between ENGIE ADR1 and THAI BEVERAGE
Assuming the 90 days trading horizon ENGIE ADR1 EO is expected to under-perform the THAI BEVERAGE. But the stock apears to be less risky and, when comparing its historical volatility, ENGIE ADR1 EO is 3.99 times less risky than THAI BEVERAGE. The stock trades about -0.21 of its potential returns per unit of risk. The THAI BEVERAGE is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 35.00 in THAI BEVERAGE on September 5, 2024 and sell it today you would earn a total of 3.00 from holding THAI BEVERAGE or generate 8.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ENGIE ADR1 EO vs. THAI BEVERAGE
Performance |
| Timeline |
| ENGIE ADR1 EO |
| THAI BEVERAGE |
ENGIE ADR1 and THAI BEVERAGE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENGIE ADR1 and THAI BEVERAGE
The main advantage of trading using opposite ENGIE ADR1 and THAI BEVERAGE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENGIE ADR1 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.| ENGIE ADR1 vs. THAI BEVERAGE | ENGIE ADR1 vs. Ebro Foods SA | ENGIE ADR1 vs. Geely Automobile Holdings | ENGIE ADR1 vs. Commercial Vehicle Group |
| THAI BEVERAGE vs. TOTAL GABON | THAI BEVERAGE vs. Walgreens Boots Alliance | THAI BEVERAGE vs. Peak Resources Limited |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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