Correlation Between THAI BEVERAGE and GRUPO CARSO
Can any of the company-specific risk be diversified away by investing in both THAI BEVERAGE and GRUPO CARSO 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 GRUPO CARSO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THAI BEVERAGE and GRUPO CARSO A1, you can compare the effects of market volatilities on THAI BEVERAGE and GRUPO CARSO 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 GRUPO CARSO. Check out your portfolio center. Please also check ongoing floating volatility patterns of THAI BEVERAGE and GRUPO CARSO.
Diversification Opportunities for THAI BEVERAGE and GRUPO CARSO
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between THAI and GRUPO is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding THAI BEVERAGE and GRUPO CARSO A1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRUPO CARSO A1 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 GRUPO CARSO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRUPO CARSO A1 has no effect on the direction of THAI BEVERAGE i.e., THAI BEVERAGE and GRUPO CARSO go up and down completely randomly.
Pair Corralation between THAI BEVERAGE and GRUPO CARSO
Assuming the 90 days trading horizon THAI BEVERAGE is expected to generate 1.21 times more return on investment than GRUPO CARSO. However, THAI BEVERAGE is 1.21 times more volatile than GRUPO CARSO A1. It trades about 0.05 of its potential returns per unit of risk. GRUPO CARSO A1 is currently generating about 0.06 per unit of risk. If you would invest 15.00 in THAI BEVERAGE on October 28, 2024 and sell it today you would earn a total of 21.00 from holding THAI BEVERAGE or generate 140.0% 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. GRUPO CARSO A1
Performance |
| Timeline |
| THAI BEVERAGE |
| GRUPO CARSO A1 |
THAI BEVERAGE and GRUPO CARSO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THAI BEVERAGE and GRUPO CARSO
The main advantage of trading using opposite THAI BEVERAGE and GRUPO CARSO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THAI BEVERAGE position performs unexpectedly, GRUPO CARSO 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 GRUPO CARSO will offset losses from the drop in GRUPO CARSO's long position.| THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc |
| GRUPO CARSO vs. Calibre Mining Corp | GRUPO CARSO vs. SBM OFFSHORE | GRUPO CARSO vs. FIREWEED METALS P | GRUPO CARSO vs. Solstad Offshore ASA |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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