Correlation Between SPORT LISBOA and Thai Beverage
Can any of the company-specific risk be diversified away by investing in both SPORT LISBOA 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 SPORT LISBOA and Thai Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPORT LISBOA E and Thai Beverage Public, you can compare the effects of market volatilities on SPORT LISBOA 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 SPORT LISBOA with a short position of Thai Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPORT LISBOA and Thai Beverage.
Diversification Opportunities for SPORT LISBOA and Thai Beverage
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between SPORT and Thai is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding SPORT LISBOA E 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 SPORT LISBOA 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 SPORT LISBOA E 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 SPORT LISBOA i.e., SPORT LISBOA and Thai Beverage go up and down completely randomly.
Pair Corralation between SPORT LISBOA and Thai Beverage
Assuming the 90 days horizon SPORT LISBOA E is expected to generate 0.74 times more return on investment than Thai Beverage. However, SPORT LISBOA E is 1.36 times less risky than Thai Beverage. It trades about 0.22 of its potential returns per unit of risk. Thai Beverage Public is currently generating about 0.06 per unit of risk. If you would invest 314.00 in SPORT LISBOA E on August 29, 2024 and sell it today you would earn a total of 32.00 from holding SPORT LISBOA E or generate 10.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPORT LISBOA E vs. Thai Beverage Public
Performance |
| Timeline |
| SPORT LISBOA E |
| Thai Beverage Public |
SPORT LISBOA and Thai Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPORT LISBOA and Thai Beverage
The main advantage of trading using opposite SPORT LISBOA and Thai Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPORT LISBOA 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.| SPORT LISBOA vs. Netflix | SPORT LISBOA vs. Warner Music Group | SPORT LISBOA vs. Superior Plus Corp | SPORT LISBOA vs. NMI Holdings |
| Thai Beverage vs. Diageo plc | Thai Beverage vs. Treasury Wine Estates | Thai Beverage vs. Marie Brizard Wine |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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