Correlation Between THAI BEVERAGE and CAL-MAINE FOODS
Can any of the company-specific risk be diversified away by investing in both THAI BEVERAGE and CAL-MAINE FOODS 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 CAL-MAINE FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THAI BEVERAGE and CAL MAINE FOODS, you can compare the effects of market volatilities on THAI BEVERAGE and CAL-MAINE FOODS 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 CAL-MAINE FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of THAI BEVERAGE and CAL-MAINE FOODS.
Diversification Opportunities for THAI BEVERAGE and CAL-MAINE FOODS
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between THAI and CAL-MAINE is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding THAI BEVERAGE and CAL MAINE FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAL MAINE FOODS 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 CAL-MAINE FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAL MAINE FOODS has no effect on the direction of THAI BEVERAGE i.e., THAI BEVERAGE and CAL-MAINE FOODS go up and down completely randomly.
Pair Corralation between THAI BEVERAGE and CAL-MAINE FOODS
Assuming the 90 days trading horizon THAI BEVERAGE is expected to generate 1.67 times less return on investment than CAL-MAINE FOODS. In addition to that, THAI BEVERAGE is 1.62 times more volatile than CAL MAINE FOODS. It trades about 0.1 of its total potential returns per unit of risk. CAL MAINE FOODS is currently generating about 0.28 per unit of volatility. If you would invest 8,276 in CAL MAINE FOODS on August 31, 2024 and sell it today you would earn a total of 876.00 from holding CAL MAINE FOODS or generate 10.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
THAI BEVERAGE vs. CAL MAINE FOODS
Performance |
| Timeline |
| THAI BEVERAGE |
| CAL MAINE FOODS |
THAI BEVERAGE and CAL-MAINE FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THAI BEVERAGE and CAL-MAINE FOODS
The main advantage of trading using opposite THAI BEVERAGE and CAL-MAINE FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THAI BEVERAGE position performs unexpectedly, CAL-MAINE FOODS 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 CAL-MAINE FOODS will offset losses from the drop in CAL-MAINE FOODS's long position.| THAI BEVERAGE vs. SCOTT TECHNOLOGY | THAI BEVERAGE vs. X Fab Silicon | THAI BEVERAGE vs. Media and Games | THAI BEVERAGE vs. GAMING FAC SA |
| CAL-MAINE FOODS vs. Verizon Communications | CAL-MAINE FOODS vs. Spirent Communications plc | CAL-MAINE FOODS vs. WillScot Mobile Mini | CAL-MAINE FOODS vs. Calibre Mining Corp |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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