Correlation Between THAI BEVERAGE and Commercial Vehicle
Can any of the company-specific risk be diversified away by investing in both THAI BEVERAGE and Commercial Vehicle 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 Commercial Vehicle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THAI BEVERAGE and Commercial Vehicle Group, you can compare the effects of market volatilities on THAI BEVERAGE and Commercial Vehicle 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 Commercial Vehicle. Check out your portfolio center. Please also check ongoing floating volatility patterns of THAI BEVERAGE and Commercial Vehicle.
Diversification Opportunities for THAI BEVERAGE and Commercial Vehicle
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between THAI and Commercial is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding THAI BEVERAGE and Commercial Vehicle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commercial Vehicle 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 Commercial Vehicle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commercial Vehicle has no effect on the direction of THAI BEVERAGE i.e., THAI BEVERAGE and Commercial Vehicle go up and down completely randomly.
Pair Corralation between THAI BEVERAGE and Commercial Vehicle
Assuming the 90 days trading horizon THAI BEVERAGE is expected to generate 1.61 times more return on investment than Commercial Vehicle. However, THAI BEVERAGE is 1.61 times more volatile than Commercial Vehicle Group. It trades about 0.05 of its potential returns per unit of risk. Commercial Vehicle Group is currently generating about -0.06 per unit of risk. If you would invest 15.00 in THAI BEVERAGE on October 13, 2024 and sell it today you would earn a total of 21.00 from holding THAI BEVERAGE or generate 140.0% 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. Commercial Vehicle Group
Performance |
Timeline |
THAI BEVERAGE |
Commercial Vehicle |
THAI BEVERAGE and Commercial Vehicle Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with THAI BEVERAGE and Commercial Vehicle
The main advantage of trading using opposite THAI BEVERAGE and Commercial Vehicle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THAI BEVERAGE position performs unexpectedly, Commercial Vehicle 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 Commercial Vehicle will offset losses from the drop in Commercial Vehicle's long position.THAI BEVERAGE vs. Marie Brizard Wine | THAI BEVERAGE vs. Chuangs China Investments | THAI BEVERAGE vs. ANTA SPORTS PRODUCT | THAI BEVERAGE vs. ECHO INVESTMENT ZY |
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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 Stocks Directory module to find actively traded stocks across global markets.
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