Correlation Between THAI BEVERAGE and Teradata Corp
Can any of the company-specific risk be diversified away by investing in both THAI BEVERAGE and Teradata Corp 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 Teradata Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THAI BEVERAGE and Teradata Corp, you can compare the effects of market volatilities on THAI BEVERAGE and Teradata Corp 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 Teradata Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of THAI BEVERAGE and Teradata Corp.
Diversification Opportunities for THAI BEVERAGE and Teradata Corp
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between THAI and Teradata is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding THAI BEVERAGE and Teradata Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teradata Corp 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 Teradata Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teradata Corp has no effect on the direction of THAI BEVERAGE i.e., THAI BEVERAGE and Teradata Corp go up and down completely randomly.
Pair Corralation between THAI BEVERAGE and Teradata Corp
Assuming the 90 days trading horizon THAI BEVERAGE is expected to generate 2.36 times more return on investment than Teradata Corp. However, THAI BEVERAGE is 2.36 times more volatile than Teradata Corp. It trades about 0.05 of its potential returns per unit of risk. Teradata Corp is currently generating about 0.01 per unit of risk. If you would invest 16.00 in THAI BEVERAGE on October 18, 2024 and sell it today you would earn a total of 21.00 from holding THAI BEVERAGE or generate 131.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
THAI BEVERAGE vs. Teradata Corp
Performance |
| Timeline |
| THAI BEVERAGE |
| Teradata Corp |
THAI BEVERAGE and Teradata Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THAI BEVERAGE and Teradata Corp
The main advantage of trading using opposite THAI BEVERAGE and Teradata Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THAI BEVERAGE position performs unexpectedly, Teradata Corp 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 Teradata Corp will offset losses from the drop in Teradata Corp's long position.| THAI BEVERAGE vs. ELMOS SEMICONDUCTOR | THAI BEVERAGE vs. Stag Industrial | THAI BEVERAGE vs. IMPERIAL TOBACCO | THAI BEVERAGE vs. Elmos Semiconductor SE |
| Teradata Corp vs. SALESFORCE INC CDR | Teradata Corp vs. MOLSON RS BEVERAGE | Teradata Corp vs. SENECA FOODS A | Teradata Corp vs. THAI BEVERAGE |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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