Correlation Between THAI BEVERAGE and Science Applications
Can any of the company-specific risk be diversified away by investing in both THAI BEVERAGE and Science Applications 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 Science Applications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THAI BEVERAGE and Science Applications International, you can compare the effects of market volatilities on THAI BEVERAGE and Science Applications 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 Science Applications. Check out your portfolio center. Please also check ongoing floating volatility patterns of THAI BEVERAGE and Science Applications.
Diversification Opportunities for THAI BEVERAGE and Science Applications
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between THAI and Science is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding THAI BEVERAGE and Science Applications Internati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Science Applications 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 Science Applications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Science Applications has no effect on the direction of THAI BEVERAGE i.e., THAI BEVERAGE and Science Applications go up and down completely randomly.
Pair Corralation between THAI BEVERAGE and Science Applications
Assuming the 90 days trading horizon THAI BEVERAGE is expected to generate 1.16 times more return on investment than Science Applications. However, THAI BEVERAGE is 1.16 times more volatile than Science Applications International. It trades about 0.01 of its potential returns per unit of risk. Science Applications International is currently generating about -0.21 per unit of risk. If you would invest 36.00 in THAI BEVERAGE on November 28, 2024 and sell it today you would earn a total of 0.00 from holding THAI BEVERAGE or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
THAI BEVERAGE vs. Science Applications Internati
Performance |
| Timeline |
| THAI BEVERAGE |
| Science Applications |
THAI BEVERAGE and Science Applications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THAI BEVERAGE and Science Applications
The main advantage of trading using opposite THAI BEVERAGE and Science Applications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THAI BEVERAGE position performs unexpectedly, Science Applications 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 Science Applications will offset losses from the drop in Science Applications' long position.| THAI BEVERAGE vs. Jacquet Metal Service | THAI BEVERAGE vs. Grupo Carso SAB | THAI BEVERAGE vs. ADRIATIC METALS LS 013355 | THAI BEVERAGE vs. Calibre Mining Corp |
| Science Applications vs. CHEMICAL INDUSTRIES | Science Applications vs. Siamgas And Petrochemicals | Science Applications vs. Marie Brizard Wine | Science Applications vs. SEKISUI CHEMICAL |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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