Correlation Between Maple Leaf and Thai Beverage
Can any of the company-specific risk be diversified away by investing in both Maple Leaf 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 Maple Leaf and Thai Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maple Leaf Foods and Thai Beverage Public, you can compare the effects of market volatilities on Maple Leaf 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 Maple Leaf with a short position of Thai Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maple Leaf and Thai Beverage.
Diversification Opportunities for Maple Leaf and Thai Beverage
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Maple and Thai is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Maple Leaf Foods 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 Maple Leaf 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 Maple Leaf Foods 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 Maple Leaf i.e., Maple Leaf and Thai Beverage go up and down completely randomly.
Pair Corralation between Maple Leaf and Thai Beverage
Assuming the 90 days trading horizon Maple Leaf Foods is expected to generate 0.48 times more return on investment than Thai Beverage. However, Maple Leaf Foods is 2.09 times less risky than Thai Beverage. It trades about 0.06 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 1,380 in Maple Leaf Foods on November 4, 2024 and sell it today you would earn a total of 30.00 from holding Maple Leaf Foods or generate 2.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maple Leaf Foods vs. Thai Beverage Public
Performance |
| Timeline |
| Maple Leaf Foods |
| Thai Beverage Public |
Maple Leaf and Thai Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maple Leaf and Thai Beverage
The main advantage of trading using opposite Maple Leaf and Thai Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maple Leaf 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.| Maple Leaf vs. Australian Agricultural | Maple Leaf vs. Sumitomo Mitsui Construction | Maple Leaf vs. NTG Nordic Transport | Maple Leaf vs. China Railway Construction |
| Thai Beverage vs. Casio Computer CoLtd | Thai Beverage vs. VIVA WINE GROUP | Thai Beverage vs. HEMISPHERE EGY | Thai Beverage vs. Ribbon Communications |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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