Correlation Between THAI BEVERAGE and Dollar General
Can any of the company-specific risk be diversified away by investing in both THAI BEVERAGE and Dollar General 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 Dollar General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THAI BEVERAGE and Dollar General, you can compare the effects of market volatilities on THAI BEVERAGE and Dollar General 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 Dollar General. Check out your portfolio center. Please also check ongoing floating volatility patterns of THAI BEVERAGE and Dollar General.
Diversification Opportunities for THAI BEVERAGE and Dollar General
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between THAI and Dollar is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding THAI BEVERAGE and Dollar General in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dollar General 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 Dollar General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dollar General has no effect on the direction of THAI BEVERAGE i.e., THAI BEVERAGE and Dollar General go up and down completely randomly.
Pair Corralation between THAI BEVERAGE and Dollar General
Assuming the 90 days trading horizon THAI BEVERAGE is expected to generate 1.97 times more return on investment than Dollar General. However, THAI BEVERAGE is 1.97 times more volatile than Dollar General. It trades about 0.06 of its potential returns per unit of risk. Dollar General is currently generating about -0.07 per unit of risk. If you would invest 15.00 in THAI BEVERAGE on September 14, 2024 and sell it today you would earn a total of 23.00 from holding THAI BEVERAGE or generate 153.33% 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. Dollar General
Performance |
| Timeline |
| THAI BEVERAGE |
| Dollar General |
THAI BEVERAGE and Dollar General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THAI BEVERAGE and Dollar General
The main advantage of trading using opposite THAI BEVERAGE and Dollar General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THAI BEVERAGE position performs unexpectedly, Dollar General 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 Dollar General will offset losses from the drop in Dollar General's long position.| THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc |
| Dollar General vs. Cogent Communications Holdings | Dollar General vs. Astral Foods Limited | Dollar General vs. Verizon Communications | Dollar General 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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