Correlation Between THAI BEVERAGE and PT Global
Can any of the company-specific risk be diversified away by investing in both THAI BEVERAGE and PT Global 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 THAI BEVERAGE and PT Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THAI BEVERAGE and PT Global Mediacom, you can compare the effects of market volatilities on THAI BEVERAGE and PT Global 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 THAI BEVERAGE with a short position of PT Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of THAI BEVERAGE and PT Global.
Diversification Opportunities for THAI BEVERAGE and PT Global
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between THAI and 06L is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding THAI BEVERAGE and PT Global Mediacom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Global Mediacom and THAI BEVERAGE 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 THAI BEVERAGE are associated (or correlated) with PT Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Global Mediacom has no effect on the direction of THAI BEVERAGE i.e., THAI BEVERAGE and PT Global go up and down completely randomly.
Pair Corralation between THAI BEVERAGE and PT Global
Assuming the 90 days trading horizon THAI BEVERAGE is expected to generate 6.31 times less return on investment than PT Global. But when comparing it to its historical volatility, THAI BEVERAGE is 8.4 times less risky than PT Global. It trades about 0.07 of its potential returns per unit of risk. PT Global Mediacom is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 0.70 in PT Global Mediacom on September 19, 2024 and sell it today you would lose (0.10) from holding PT Global Mediacom or give up 14.29% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
THAI BEVERAGE vs. PT Global Mediacom
Performance |
Timeline |
THAI BEVERAGE |
PT Global Mediacom |
THAI BEVERAGE and PT Global Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with THAI BEVERAGE and PT Global
The main advantage of trading using opposite THAI BEVERAGE and PT Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THAI BEVERAGE position performs unexpectedly, PT Global 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 PT Global will offset losses from the drop in PT Global's long position.THAI BEVERAGE vs. SERI INDUSTRIAL EO | THAI BEVERAGE vs. CVR Medical Corp | THAI BEVERAGE vs. ADRIATIC METALS LS 013355 | THAI BEVERAGE vs. MEDICAL FACILITIES NEW |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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