Correlation Between Kingdee International and THAI BEVERAGE
Can any of the company-specific risk be diversified away by investing in both Kingdee International 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 Kingdee International and THAI BEVERAGE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kingdee International Software and THAI BEVERAGE, you can compare the effects of market volatilities on Kingdee International 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 Kingdee International with a short position of THAI BEVERAGE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingdee International and THAI BEVERAGE.
Diversification Opportunities for Kingdee International and THAI BEVERAGE
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kingdee and THAI is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Kingdee International Software and THAI BEVERAGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THAI BEVERAGE and Kingdee International 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 Kingdee International Software 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 Kingdee International i.e., Kingdee International and THAI BEVERAGE go up and down completely randomly.
Pair Corralation between Kingdee International and THAI BEVERAGE
Assuming the 90 days trading horizon Kingdee International Software is expected to under-perform the THAI BEVERAGE. In addition to that, Kingdee International is 1.58 times more volatile than THAI BEVERAGE. It trades about -0.13 of its total potential returns per unit of risk. THAI BEVERAGE is currently generating about -0.08 per unit of volatility. If you would invest 37.00 in THAI BEVERAGE on October 20, 2024 and sell it today you would lose (1.00) from holding THAI BEVERAGE or give up 2.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Kingdee International Software vs. THAI BEVERAGE
Performance |
| Timeline |
| Kingdee International |
| THAI BEVERAGE |
Kingdee International and THAI BEVERAGE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingdee International and THAI BEVERAGE
The main advantage of trading using opposite Kingdee International and THAI BEVERAGE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingdee International 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.| Kingdee International vs. PENN NATL GAMING | Kingdee International vs. CDN IMPERIAL BANK | Kingdee International vs. UNIQA INSURANCE GR | Kingdee International vs. GAMING FAC SA |
| THAI BEVERAGE vs. ASURE SOFTWARE | THAI BEVERAGE vs. Take Two Interactive Software | THAI BEVERAGE vs. CyberArk Software | THAI BEVERAGE vs. ADDUS HOMECARE |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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