Correlation Between THAI BEVERAGE and Advanced Micro
Can any of the company-specific risk be diversified away by investing in both THAI BEVERAGE and Advanced Micro 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 Advanced Micro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THAI BEVERAGE and Advanced Micro Devices, you can compare the effects of market volatilities on THAI BEVERAGE and Advanced Micro 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 Advanced Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of THAI BEVERAGE and Advanced Micro.
Diversification Opportunities for THAI BEVERAGE and Advanced Micro
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between THAI and Advanced is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding THAI BEVERAGE and Advanced Micro Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Micro Devices 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 Advanced Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Micro Devices has no effect on the direction of THAI BEVERAGE i.e., THAI BEVERAGE and Advanced Micro go up and down completely randomly.
Pair Corralation between THAI BEVERAGE and Advanced Micro
Assuming the 90 days trading horizon THAI BEVERAGE is expected to generate 0.85 times more return on investment than Advanced Micro. However, THAI BEVERAGE is 1.18 times less risky than Advanced Micro. It trades about 0.06 of its potential returns per unit of risk. Advanced Micro Devices is currently generating about -0.02 per unit of risk. If you would invest 34.00 in THAI BEVERAGE on September 3, 2024 and sell it today you would earn a total of 5.00 from holding THAI BEVERAGE or generate 14.71% 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. Advanced Micro Devices
Performance |
| Timeline |
| THAI BEVERAGE |
| Advanced Micro Devices |
THAI BEVERAGE and Advanced Micro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THAI BEVERAGE and Advanced Micro
The main advantage of trading using opposite THAI BEVERAGE and Advanced Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THAI BEVERAGE position performs unexpectedly, Advanced Micro 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 Advanced Micro will offset losses from the drop in Advanced Micro's long position.| THAI BEVERAGE vs. Ramsay Health Care | THAI BEVERAGE vs. National Health Investors | THAI BEVERAGE vs. Air Transport Services | THAI BEVERAGE vs. Texas Roadhouse |
| Advanced Micro vs. Information Services International Dentsu | Advanced Micro vs. MagnaChip Semiconductor Corp | Advanced Micro vs. DOCDATA | Advanced Micro vs. Nordic Semiconductor 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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