Correlation Between THAI BEVERAGE and AUSNUTRIA DAIRY
Can any of the company-specific risk be diversified away by investing in both THAI BEVERAGE and AUSNUTRIA DAIRY 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 AUSNUTRIA DAIRY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THAI BEVERAGE and AUSNUTRIA DAIRY, you can compare the effects of market volatilities on THAI BEVERAGE and AUSNUTRIA DAIRY 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 AUSNUTRIA DAIRY. Check out your portfolio center. Please also check ongoing floating volatility patterns of THAI BEVERAGE and AUSNUTRIA DAIRY.
Diversification Opportunities for THAI BEVERAGE and AUSNUTRIA DAIRY
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between THAI and AUSNUTRIA is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding THAI BEVERAGE and AUSNUTRIA DAIRY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AUSNUTRIA DAIRY 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 AUSNUTRIA DAIRY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AUSNUTRIA DAIRY has no effect on the direction of THAI BEVERAGE i.e., THAI BEVERAGE and AUSNUTRIA DAIRY go up and down completely randomly.
Pair Corralation between THAI BEVERAGE and AUSNUTRIA DAIRY
Assuming the 90 days trading horizon THAI BEVERAGE is expected to generate 2.35 times more return on investment than AUSNUTRIA DAIRY. However, THAI BEVERAGE is 2.35 times more volatile than AUSNUTRIA DAIRY. It trades about 0.08 of its potential returns per unit of risk. AUSNUTRIA DAIRY is currently generating about 0.0 per unit of risk. If you would invest 18.00 in THAI BEVERAGE on September 2, 2024 and sell it today you would earn a total of 21.00 from holding THAI BEVERAGE or generate 116.67% 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. AUSNUTRIA DAIRY
Performance |
| Timeline |
| THAI BEVERAGE |
| AUSNUTRIA DAIRY |
THAI BEVERAGE and AUSNUTRIA DAIRY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THAI BEVERAGE and AUSNUTRIA DAIRY
The main advantage of trading using opposite THAI BEVERAGE and AUSNUTRIA DAIRY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THAI BEVERAGE position performs unexpectedly, AUSNUTRIA DAIRY 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 AUSNUTRIA DAIRY will offset losses from the drop in AUSNUTRIA DAIRY's long position.| THAI BEVERAGE vs. SIVERS SEMICONDUCTORS AB | THAI BEVERAGE vs. Darden Restaurants | THAI BEVERAGE vs. Reliance Steel Aluminum | THAI BEVERAGE vs. Q2M Managementberatung AG |
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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