Correlation Between THAI BEVERAGE and PARKEN Sport
Can any of the company-specific risk be diversified away by investing in both THAI BEVERAGE and PARKEN Sport 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 PARKEN Sport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THAI BEVERAGE and PARKEN Sport Entertainment, you can compare the effects of market volatilities on THAI BEVERAGE and PARKEN Sport 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 PARKEN Sport. Check out your portfolio center. Please also check ongoing floating volatility patterns of THAI BEVERAGE and PARKEN Sport.
Diversification Opportunities for THAI BEVERAGE and PARKEN Sport
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between THAI and PARKEN is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding THAI BEVERAGE and PARKEN Sport Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PARKEN Sport Enterta 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 PARKEN Sport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PARKEN Sport Enterta has no effect on the direction of THAI BEVERAGE i.e., THAI BEVERAGE and PARKEN Sport go up and down completely randomly.
Pair Corralation between THAI BEVERAGE and PARKEN Sport
Assuming the 90 days trading horizon THAI BEVERAGE is expected to generate 1.33 times more return on investment than PARKEN Sport. However, THAI BEVERAGE is 1.33 times more volatile than PARKEN Sport Entertainment. It trades about 0.07 of its potential returns per unit of risk. PARKEN Sport Entertainment is currently generating about 0.03 per unit of risk. If you would invest 33.00 in THAI BEVERAGE on September 1, 2024 and sell it today you would earn a total of 6.00 from holding THAI BEVERAGE or generate 18.18% 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. PARKEN Sport Entertainment
Performance |
| Timeline |
| THAI BEVERAGE |
| PARKEN Sport Enterta |
THAI BEVERAGE and PARKEN Sport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THAI BEVERAGE and PARKEN Sport
The main advantage of trading using opposite THAI BEVERAGE and PARKEN Sport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THAI BEVERAGE position performs unexpectedly, PARKEN Sport 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 PARKEN Sport will offset losses from the drop in PARKEN Sport's long position.| THAI BEVERAGE vs. RYU Apparel | THAI BEVERAGE vs. SPORTING | THAI BEVERAGE vs. Big 5 Sporting | THAI BEVERAGE vs. COLUMBIA SPORTSWEAR |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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