Correlation Between TMBThanachart Bank and Avery Dennison
Can any of the company-specific risk be diversified away by investing in both TMBThanachart Bank and Avery Dennison 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 TMBThanachart Bank and Avery Dennison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TMBThanachart Bank Public and Avery Dennison Corp, you can compare the effects of market volatilities on TMBThanachart Bank and Avery Dennison 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 TMBThanachart Bank with a short position of Avery Dennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of TMBThanachart Bank and Avery Dennison.
Diversification Opportunities for TMBThanachart Bank and Avery Dennison
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TMBThanachart and Avery is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding TMBThanachart Bank Public and Avery Dennison Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avery Dennison Corp and TMBThanachart Bank 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 TMBThanachart Bank Public are associated (or correlated) with Avery Dennison. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avery Dennison Corp has no effect on the direction of TMBThanachart Bank i.e., TMBThanachart Bank and Avery Dennison go up and down completely randomly.
Pair Corralation between TMBThanachart Bank and Avery Dennison
Assuming the 90 days trading horizon TMBThanachart Bank Public is expected to generate 1.43 times more return on investment than Avery Dennison. However, TMBThanachart Bank is 1.43 times more volatile than Avery Dennison Corp. It trades about 0.07 of its potential returns per unit of risk. Avery Dennison Corp is currently generating about 0.04 per unit of risk. If you would invest 3.90 in TMBThanachart Bank Public on September 14, 2024 and sell it today you would earn a total of 1.10 from holding TMBThanachart Bank Public or generate 28.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.64% |
| Values | Daily Returns |
TMBThanachart Bank Public vs. Avery Dennison Corp
Performance |
| Timeline |
| TMBThanachart Bank Public |
| Avery Dennison Corp |
TMBThanachart Bank and Avery Dennison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TMBThanachart Bank and Avery Dennison
The main advantage of trading using opposite TMBThanachart Bank and Avery Dennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TMBThanachart Bank position performs unexpectedly, Avery Dennison 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 Avery Dennison will offset losses from the drop in Avery Dennison's long position.| TMBThanachart Bank vs. Singapore Telecommunications Limited | TMBThanachart Bank vs. MAROC TELECOM | TMBThanachart Bank vs. Japan Tobacco | TMBThanachart Bank vs. American Eagle Outfitters |
| Avery Dennison vs. Lifeway Foods | Avery Dennison vs. Mitsui Chemicals | Avery Dennison vs. Austevoll Seafood ASA | Avery Dennison vs. Verizon 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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