Correlation Between THAI BEVERAGE and EMERSON ELECTRIC
Can any of the company-specific risk be diversified away by investing in both THAI BEVERAGE and EMERSON ELECTRIC 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 EMERSON ELECTRIC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THAI BEVERAGE and EMERSON ELECTRIC, you can compare the effects of market volatilities on THAI BEVERAGE and EMERSON ELECTRIC 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 EMERSON ELECTRIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of THAI BEVERAGE and EMERSON ELECTRIC.
Diversification Opportunities for THAI BEVERAGE and EMERSON ELECTRIC
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between THAI and EMERSON is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding THAI BEVERAGE and EMERSON ELECTRIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMERSON ELECTRIC 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 EMERSON ELECTRIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMERSON ELECTRIC has no effect on the direction of THAI BEVERAGE i.e., THAI BEVERAGE and EMERSON ELECTRIC go up and down completely randomly.
Pair Corralation between THAI BEVERAGE and EMERSON ELECTRIC
Assuming the 90 days trading horizon THAI BEVERAGE is expected to generate 1.56 times more return on investment than EMERSON ELECTRIC. However, THAI BEVERAGE is 1.56 times more volatile than EMERSON ELECTRIC. It trades about -0.19 of its potential returns per unit of risk. EMERSON ELECTRIC is currently generating about -0.44 per unit of risk. If you would invest 38.00 in THAI BEVERAGE on October 13, 2024 and sell it today you would lose (2.00) from holding THAI BEVERAGE or give up 5.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
THAI BEVERAGE vs. EMERSON ELECTRIC
Performance |
| Timeline |
| THAI BEVERAGE |
| EMERSON ELECTRIC |
THAI BEVERAGE and EMERSON ELECTRIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THAI BEVERAGE and EMERSON ELECTRIC
The main advantage of trading using opposite THAI BEVERAGE and EMERSON ELECTRIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THAI BEVERAGE position performs unexpectedly, EMERSON ELECTRIC 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 EMERSON ELECTRIC will offset losses from the drop in EMERSON ELECTRIC's long position.| THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc |
| EMERSON ELECTRIC vs. Siamgas And Petrochemicals | EMERSON ELECTRIC vs. Sekisui Chemical Co | EMERSON ELECTRIC vs. Kingdee International Software | EMERSON ELECTRIC vs. Casio Computer CoLtd |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |