Correlation Between NAKED WINES and Thai Beverage
Can any of the company-specific risk be diversified away by investing in both NAKED WINES 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 NAKED WINES and Thai Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NAKED WINES PLC and Thai Beverage Public, you can compare the effects of market volatilities on NAKED WINES 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 NAKED WINES with a short position of Thai Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of NAKED WINES and Thai Beverage.
Diversification Opportunities for NAKED WINES and Thai Beverage
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NAKED and Thai is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding NAKED WINES PLC 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 NAKED WINES 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 NAKED WINES PLC 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 NAKED WINES i.e., NAKED WINES and Thai Beverage go up and down completely randomly.
Pair Corralation between NAKED WINES and Thai Beverage
Assuming the 90 days horizon NAKED WINES PLC is expected to under-perform the Thai Beverage. But the stock apears to be less risky and, when comparing its historical volatility, NAKED WINES PLC is 1.38 times less risky than Thai Beverage. The stock trades about -0.02 of its potential returns per unit of risk. The Thai Beverage Public is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 16.00 in Thai Beverage Public on October 15, 2024 and sell it today you would earn a total of 20.00 from holding Thai Beverage Public or generate 125.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NAKED WINES PLC vs. Thai Beverage Public
Performance |
| Timeline |
| NAKED WINES PLC |
| Thai Beverage Public |
NAKED WINES and Thai Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NAKED WINES and Thai Beverage
The main advantage of trading using opposite NAKED WINES and Thai Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NAKED WINES 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.| NAKED WINES vs. China Datang | NAKED WINES vs. TRAINLINE PLC LS | NAKED WINES vs. CN DATANG C | NAKED WINES vs. GOLD ROAD RES |
| Thai Beverage vs. National Beverage Corp | Thai Beverage vs. United Breweries Co | Thai Beverage vs. Performance Food Group | Thai Beverage vs. THAI BEVERAGE |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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