Correlation Between THAI BEVERAGE and HANOVER INSURANCE
Can any of the company-specific risk be diversified away by investing in both THAI BEVERAGE and HANOVER INSURANCE 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 HANOVER INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THAI BEVERAGE and HANOVER INSURANCE, you can compare the effects of market volatilities on THAI BEVERAGE and HANOVER INSURANCE 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 HANOVER INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of THAI BEVERAGE and HANOVER INSURANCE.
Diversification Opportunities for THAI BEVERAGE and HANOVER INSURANCE
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between THAI and HANOVER is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding THAI BEVERAGE and HANOVER INSURANCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HANOVER INSURANCE 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 HANOVER INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HANOVER INSURANCE has no effect on the direction of THAI BEVERAGE i.e., THAI BEVERAGE and HANOVER INSURANCE go up and down completely randomly.
Pair Corralation between THAI BEVERAGE and HANOVER INSURANCE
Assuming the 90 days trading horizon THAI BEVERAGE is expected to generate 3.45 times more return on investment than HANOVER INSURANCE. However, THAI BEVERAGE is 3.45 times more volatile than HANOVER INSURANCE. It trades about 0.06 of its potential returns per unit of risk. HANOVER INSURANCE is currently generating about 0.03 per unit of risk. If you would invest 14.00 in THAI BEVERAGE on August 28, 2024 and sell it today you would earn a total of 22.00 from holding THAI BEVERAGE or generate 157.14% 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. HANOVER INSURANCE
Performance |
| Timeline |
| THAI BEVERAGE |
| HANOVER INSURANCE |
THAI BEVERAGE and HANOVER INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THAI BEVERAGE and HANOVER INSURANCE
The main advantage of trading using opposite THAI BEVERAGE and HANOVER INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THAI BEVERAGE position performs unexpectedly, HANOVER INSURANCE 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 HANOVER INSURANCE will offset losses from the drop in HANOVER INSURANCE's long position.| THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Microsoft |
| HANOVER INSURANCE vs. CHINA TONTINE WINES | HANOVER INSURANCE vs. Computer And Technologies | HANOVER INSURANCE vs. Media and Games | HANOVER INSURANCE vs. Computershare Limited |
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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