Correlation Between Network International and Thai Beverage
Can any of the company-specific risk be diversified away by investing in both Network 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 Network 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 Network International Holdings and Thai Beverage Public, you can compare the effects of market volatilities on Network 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 Network International with a short position of Thai Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Network International and Thai Beverage.
Diversification Opportunities for Network International and Thai Beverage
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Network and Thai is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Network International Holdings 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 Network 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 Network International Holdings 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 Network International i.e., Network International and Thai Beverage go up and down completely randomly.
Pair Corralation between Network International and Thai Beverage
Assuming the 90 days horizon Network International is expected to generate 1.14 times less return on investment than Thai Beverage. But when comparing it to its historical volatility, Network International Holdings is 3.21 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 0.02 of returns per unit of risk over similar time horizon. If you would invest 48.00 in Thai Beverage Public on August 27, 2024 and sell it today you would lose (13.00) from holding Thai Beverage Public or give up 27.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.48% |
| Values | Daily Returns |
Network International Holdings vs. Thai Beverage Public
Performance |
| Timeline |
| Network International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Thai Beverage Public |
Network International and Thai Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Network International and Thai Beverage
The main advantage of trading using opposite Network International and Thai Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Network 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.| Network International vs. Cerberus Cyber Sentinel | Network International vs. Gorilla Technology Group | Network International vs. Taoping | Network International vs. Crowdstrike Holdings |
| Thai Beverage vs. Diageo PLC ADR | Thai Beverage vs. Constellation Brands Class | Thai Beverage vs. Morningstar Unconstrained Allocation | Thai Beverage vs. SEI Investments |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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