Correlation Between InterContinental and Thai Beverage
Can any of the company-specific risk be diversified away by investing in both InterContinental 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 InterContinental and Thai Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InterContinental Hotels Group and Thai Beverage Public, you can compare the effects of market volatilities on InterContinental 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 InterContinental with a short position of Thai Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and Thai Beverage.
Diversification Opportunities for InterContinental and Thai Beverage
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between InterContinental and Thai is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group 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 InterContinental 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 InterContinental Hotels Group 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 InterContinental i.e., InterContinental and Thai Beverage go up and down completely randomly.
Pair Corralation between InterContinental and Thai Beverage
Assuming the 90 days trading horizon InterContinental Hotels Group is expected to under-perform the Thai Beverage. But the stock apears to be less risky and, when comparing its historical volatility, InterContinental Hotels Group is 4.71 times less risky than Thai Beverage. The stock trades about -0.2 of its potential returns per unit of risk. The Thai Beverage Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 38.00 in Thai Beverage Public on October 13, 2024 and sell it today you would earn a total of 1.00 from holding Thai Beverage Public or generate 2.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
InterContinental Hotels Group vs. Thai Beverage Public
Performance |
| Timeline |
| InterContinental Hotels |
| Thai Beverage Public |
InterContinental and Thai Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InterContinental and Thai Beverage
The main advantage of trading using opposite InterContinental and Thai Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental 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.| InterContinental vs. Osisko Metals | InterContinental vs. Nippon Light Metal | InterContinental vs. FIREWEED METALS P | InterContinental vs. Global Ship Lease |
| Thai Beverage vs. CARSALESCOM | Thai Beverage vs. CarsalesCom | Thai Beverage vs. Cal Maine Foods | Thai Beverage vs. EBRO FOODS |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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