Correlation Between THAI BEVERAGE and Rubis SCA
Can any of the company-specific risk be diversified away by investing in both THAI BEVERAGE and Rubis SCA 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 Rubis SCA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THAI BEVERAGE and Rubis SCA, you can compare the effects of market volatilities on THAI BEVERAGE and Rubis SCA 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 Rubis SCA. Check out your portfolio center. Please also check ongoing floating volatility patterns of THAI BEVERAGE and Rubis SCA.
Diversification Opportunities for THAI BEVERAGE and Rubis SCA
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between THAI and Rubis is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding THAI BEVERAGE and Rubis SCA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rubis SCA 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 Rubis SCA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rubis SCA has no effect on the direction of THAI BEVERAGE i.e., THAI BEVERAGE and Rubis SCA go up and down completely randomly.
Pair Corralation between THAI BEVERAGE and Rubis SCA
Assuming the 90 days trading horizon THAI BEVERAGE is expected to generate 2.7 times more return on investment than Rubis SCA. However, THAI BEVERAGE is 2.7 times more volatile than Rubis SCA. It trades about 0.07 of its potential returns per unit of risk. Rubis SCA is currently generating about 0.04 per unit of risk. If you would invest 18.00 in THAI BEVERAGE on September 23, 2024 and sell it today you would earn a total of 19.00 from holding THAI BEVERAGE or generate 105.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
THAI BEVERAGE vs. Rubis SCA
Performance |
| Timeline |
| THAI BEVERAGE |
| Rubis SCA |
THAI BEVERAGE and Rubis SCA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THAI BEVERAGE and Rubis SCA
The main advantage of trading using opposite THAI BEVERAGE and Rubis SCA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THAI BEVERAGE position performs unexpectedly, Rubis SCA 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 Rubis SCA will offset losses from the drop in Rubis SCA's long position.| THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc |
| Rubis SCA vs. National Beverage Corp | Rubis SCA vs. Ebro Foods SA | Rubis SCA vs. THAI BEVERAGE | Rubis SCA vs. EBRO FOODS |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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