Correlation Between THAI BEVERAGE and TIANQI LITHIUM
Can any of the company-specific risk be diversified away by investing in both THAI BEVERAGE and TIANQI LITHIUM 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 TIANQI LITHIUM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THAI BEVERAGE and TIANQI LITHIUM H, you can compare the effects of market volatilities on THAI BEVERAGE and TIANQI LITHIUM 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 TIANQI LITHIUM. Check out your portfolio center. Please also check ongoing floating volatility patterns of THAI BEVERAGE and TIANQI LITHIUM.
Diversification Opportunities for THAI BEVERAGE and TIANQI LITHIUM
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between THAI and TIANQI is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding THAI BEVERAGE and TIANQI LITHIUM H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TIANQI LITHIUM H 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 TIANQI LITHIUM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TIANQI LITHIUM H has no effect on the direction of THAI BEVERAGE i.e., THAI BEVERAGE and TIANQI LITHIUM go up and down completely randomly.
Pair Corralation between THAI BEVERAGE and TIANQI LITHIUM
Assuming the 90 days trading horizon THAI BEVERAGE is expected to generate 0.58 times more return on investment than TIANQI LITHIUM. However, THAI BEVERAGE is 1.73 times less risky than TIANQI LITHIUM. It trades about 0.15 of its potential returns per unit of risk. TIANQI LITHIUM H is currently generating about 0.04 per unit of risk. If you would invest 35.00 in THAI BEVERAGE on September 5, 2024 and sell it today you would earn a total of 3.00 from holding THAI BEVERAGE or generate 8.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
THAI BEVERAGE vs. TIANQI LITHIUM H
Performance |
| Timeline |
| THAI BEVERAGE |
| TIANQI LITHIUM H |
THAI BEVERAGE and TIANQI LITHIUM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THAI BEVERAGE and TIANQI LITHIUM
The main advantage of trading using opposite THAI BEVERAGE and TIANQI LITHIUM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THAI BEVERAGE position performs unexpectedly, TIANQI LITHIUM 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 TIANQI LITHIUM will offset losses from the drop in TIANQI LITHIUM's long position.| THAI BEVERAGE vs. TOTAL GABON | THAI BEVERAGE vs. Walgreens Boots Alliance | THAI BEVERAGE vs. Peak Resources Limited |
| TIANQI LITHIUM vs. THAI BEVERAGE | TIANQI LITHIUM vs. MINCO SILVER | TIANQI LITHIUM vs. Ebro Foods SA | TIANQI LITHIUM vs. NISSIN FOODS HLDGS |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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