Correlation Between THAI BEVERAGE and NEW MILLENNIUM
Can any of the company-specific risk be diversified away by investing in both THAI BEVERAGE and NEW MILLENNIUM 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 NEW MILLENNIUM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THAI BEVERAGE and NEW MILLENNIUM IRON, you can compare the effects of market volatilities on THAI BEVERAGE and NEW MILLENNIUM 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 NEW MILLENNIUM. Check out your portfolio center. Please also check ongoing floating volatility patterns of THAI BEVERAGE and NEW MILLENNIUM.
Diversification Opportunities for THAI BEVERAGE and NEW MILLENNIUM
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between THAI and NEW is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding THAI BEVERAGE and NEW MILLENNIUM IRON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEW MILLENNIUM IRON 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 NEW MILLENNIUM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEW MILLENNIUM IRON has no effect on the direction of THAI BEVERAGE i.e., THAI BEVERAGE and NEW MILLENNIUM go up and down completely randomly.
Pair Corralation between THAI BEVERAGE and NEW MILLENNIUM
Assuming the 90 days trading horizon THAI BEVERAGE is expected to under-perform the NEW MILLENNIUM. But the stock apears to be less risky and, when comparing its historical volatility, THAI BEVERAGE is 1.27 times less risky than NEW MILLENNIUM. The stock trades about -0.07 of its potential returns per unit of risk. The NEW MILLENNIUM IRON is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 725.00 in NEW MILLENNIUM IRON on October 28, 2024 and sell it today you would earn a total of 25.00 from holding NEW MILLENNIUM IRON or generate 3.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
THAI BEVERAGE vs. NEW MILLENNIUM IRON
Performance |
| Timeline |
| THAI BEVERAGE |
| NEW MILLENNIUM IRON |
THAI BEVERAGE and NEW MILLENNIUM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THAI BEVERAGE and NEW MILLENNIUM
The main advantage of trading using opposite THAI BEVERAGE and NEW MILLENNIUM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THAI BEVERAGE position performs unexpectedly, NEW MILLENNIUM 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 NEW MILLENNIUM will offset losses from the drop in NEW MILLENNIUM's long position.| THAI BEVERAGE vs. TELECOM ITALIA | THAI BEVERAGE vs. GigaMedia | THAI BEVERAGE vs. QINGCI GAMES INC | THAI BEVERAGE vs. Cairo Communication SpA |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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