Correlation Between THAI BEVERAGE and Apple
Can any of the company-specific risk be diversified away by investing in both THAI BEVERAGE and Apple 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 Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THAI BEVERAGE and Apple Inc, you can compare the effects of market volatilities on THAI BEVERAGE and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of THAI BEVERAGE and Apple.
Diversification Opportunities for THAI BEVERAGE and Apple
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between THAI and Apple is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding THAI BEVERAGE and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of THAI BEVERAGE i.e., THAI BEVERAGE and Apple go up and down completely randomly.
Pair Corralation between THAI BEVERAGE and Apple
Assuming the 90 days trading horizon THAI BEVERAGE is expected to generate 3.47 times more return on investment than Apple. However, THAI BEVERAGE is 3.47 times more volatile than Apple Inc. It trades about 0.06 of its potential returns per unit of risk. Apple Inc is currently generating about 0.09 per unit of risk. If you would invest 15.00 in THAI BEVERAGE on September 12, 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
THAI BEVERAGE vs. Apple Inc
Performance |
| Timeline |
| THAI BEVERAGE |
| Apple Inc |
THAI BEVERAGE and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THAI BEVERAGE and Apple
The main advantage of trading using opposite THAI BEVERAGE and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THAI BEVERAGE position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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