Correlation Between THAI BEVERAGE and SANOK RUBBER
Can any of the company-specific risk be diversified away by investing in both THAI BEVERAGE and SANOK RUBBER 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 SANOK RUBBER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THAI BEVERAGE and SANOK RUBBER ZY, you can compare the effects of market volatilities on THAI BEVERAGE and SANOK RUBBER 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 SANOK RUBBER. Check out your portfolio center. Please also check ongoing floating volatility patterns of THAI BEVERAGE and SANOK RUBBER.
Diversification Opportunities for THAI BEVERAGE and SANOK RUBBER
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between THAI and SANOK is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding THAI BEVERAGE and SANOK RUBBER ZY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SANOK RUBBER ZY 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 SANOK RUBBER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SANOK RUBBER ZY has no effect on the direction of THAI BEVERAGE i.e., THAI BEVERAGE and SANOK RUBBER go up and down completely randomly.
Pair Corralation between THAI BEVERAGE and SANOK RUBBER
Assuming the 90 days trading horizon THAI BEVERAGE is expected to generate 3.33 times more return on investment than SANOK RUBBER. However, THAI BEVERAGE is 3.33 times more volatile than SANOK RUBBER ZY. It trades about 0.06 of its potential returns per unit of risk. SANOK RUBBER ZY is currently generating about -0.18 per unit of risk. If you would invest 35.00 in THAI BEVERAGE on August 27, 2024 and sell it today you would earn a total of 1.00 from holding THAI BEVERAGE or generate 2.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
THAI BEVERAGE vs. SANOK RUBBER ZY
Performance |
| Timeline |
| THAI BEVERAGE |
| SANOK RUBBER ZY |
THAI BEVERAGE and SANOK RUBBER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THAI BEVERAGE and SANOK RUBBER
The main advantage of trading using opposite THAI BEVERAGE and SANOK RUBBER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THAI BEVERAGE position performs unexpectedly, SANOK RUBBER 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 SANOK RUBBER will offset losses from the drop in SANOK RUBBER's long position.| THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Microsoft |
| SANOK RUBBER vs. Superior Plus Corp | SANOK RUBBER vs. NMI Holdings | SANOK RUBBER vs. Origin Agritech | SANOK RUBBER 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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