Correlation Between THAI BEVERAGE and CITIC Telecom
Can any of the company-specific risk be diversified away by investing in both THAI BEVERAGE and CITIC Telecom 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 CITIC Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THAI BEVERAGE and CITIC Telecom International, you can compare the effects of market volatilities on THAI BEVERAGE and CITIC Telecom 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 CITIC Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of THAI BEVERAGE and CITIC Telecom.
Diversification Opportunities for THAI BEVERAGE and CITIC Telecom
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between THAI and CITIC is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding THAI BEVERAGE and CITIC Telecom International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC Telecom Intern 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 CITIC Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIC Telecom Intern has no effect on the direction of THAI BEVERAGE i.e., THAI BEVERAGE and CITIC Telecom go up and down completely randomly.
Pair Corralation between THAI BEVERAGE and CITIC Telecom
Assuming the 90 days trading horizon THAI BEVERAGE is expected to generate 0.47 times more return on investment than CITIC Telecom. However, THAI BEVERAGE is 2.11 times less risky than CITIC Telecom. It trades about -0.19 of its potential returns per unit of risk. CITIC Telecom International is currently generating about -0.11 per unit of risk. If you would invest 39.00 in THAI BEVERAGE on October 12, 2024 and sell it today you would lose (2.00) from holding THAI BEVERAGE or give up 5.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
THAI BEVERAGE vs. CITIC Telecom International
Performance |
| Timeline |
| THAI BEVERAGE |
| CITIC Telecom Intern |
THAI BEVERAGE and CITIC Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THAI BEVERAGE and CITIC Telecom
The main advantage of trading using opposite THAI BEVERAGE and CITIC Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THAI BEVERAGE position performs unexpectedly, CITIC Telecom 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 CITIC Telecom will offset losses from the drop in CITIC Telecom's long position.| THAI BEVERAGE vs. TRAVEL LEISURE DL 01 | THAI BEVERAGE vs. Ebro Foods SA | THAI BEVERAGE vs. PLAYTIKA HOLDING DL 01 | THAI BEVERAGE vs. TYSON FOODS A |
| CITIC Telecom vs. THAI BEVERAGE | CITIC Telecom vs. CENTURIA OFFICE REIT | CITIC Telecom vs. alstria office REIT AG | CITIC Telecom vs. KENEDIX OFFICE INV |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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