Correlation Between SOLSTAD OFFSHORE and THAI BEVERAGE
Can any of the company-specific risk be diversified away by investing in both SOLSTAD OFFSHORE 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 SOLSTAD OFFSHORE and THAI BEVERAGE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SOLSTAD OFFSHORE NK and THAI BEVERAGE, you can compare the effects of market volatilities on SOLSTAD OFFSHORE 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 SOLSTAD OFFSHORE with a short position of THAI BEVERAGE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOLSTAD OFFSHORE and THAI BEVERAGE.
Diversification Opportunities for SOLSTAD OFFSHORE and THAI BEVERAGE
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SOLSTAD and THAI is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding SOLSTAD OFFSHORE NK and THAI BEVERAGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THAI BEVERAGE and SOLSTAD OFFSHORE 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 SOLSTAD OFFSHORE NK 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 has no effect on the direction of SOLSTAD OFFSHORE i.e., SOLSTAD OFFSHORE and THAI BEVERAGE go up and down completely randomly.
Pair Corralation between SOLSTAD OFFSHORE and THAI BEVERAGE
Assuming the 90 days horizon SOLSTAD OFFSHORE is expected to generate 2.37 times less return on investment than THAI BEVERAGE. But when comparing it to its historical volatility, SOLSTAD OFFSHORE NK is 1.18 times less risky than THAI BEVERAGE. It trades about 0.03 of its potential returns per unit of risk. THAI BEVERAGE is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 14.00 in THAI BEVERAGE on August 29, 2024 and sell it today you would earn a total of 24.00 from holding THAI BEVERAGE or generate 171.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
SOLSTAD OFFSHORE NK vs. THAI BEVERAGE
Performance |
| Timeline |
| SOLSTAD OFFSHORE |
| THAI BEVERAGE |
SOLSTAD OFFSHORE and THAI BEVERAGE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOLSTAD OFFSHORE and THAI BEVERAGE
The main advantage of trading using opposite SOLSTAD OFFSHORE and THAI BEVERAGE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOLSTAD OFFSHORE 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.| SOLSTAD OFFSHORE vs. ZIM Integrated Shipping | SOLSTAD OFFSHORE vs. Superior Plus Corp | SOLSTAD OFFSHORE vs. NMI Holdings | SOLSTAD OFFSHORE vs. SIVERS SEMICONDUCTORS AB |
| THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Superior Plus Corp | THAI BEVERAGE vs. SIVERS SEMICONDUCTORS AB |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |