Correlation Between THAI BEVERAGE and Fukuyama Transporting
Can any of the company-specific risk be diversified away by investing in both THAI BEVERAGE and Fukuyama Transporting 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 Fukuyama Transporting into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THAI BEVERAGE and Fukuyama Transporting Co, you can compare the effects of market volatilities on THAI BEVERAGE and Fukuyama Transporting 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 Fukuyama Transporting. Check out your portfolio center. Please also check ongoing floating volatility patterns of THAI BEVERAGE and Fukuyama Transporting.
Diversification Opportunities for THAI BEVERAGE and Fukuyama Transporting
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between THAI and Fukuyama is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding THAI BEVERAGE and Fukuyama Transporting Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fukuyama Transporting 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 Fukuyama Transporting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fukuyama Transporting has no effect on the direction of THAI BEVERAGE i.e., THAI BEVERAGE and Fukuyama Transporting go up and down completely randomly.
Pair Corralation between THAI BEVERAGE and Fukuyama Transporting
Assuming the 90 days trading horizon THAI BEVERAGE is expected to generate 1.98 times more return on investment than Fukuyama Transporting. However, THAI BEVERAGE is 1.98 times more volatile than Fukuyama Transporting Co. It trades about -0.08 of its potential returns per unit of risk. Fukuyama Transporting Co is currently generating about -0.18 per unit of risk. If you would invest 38.00 in THAI BEVERAGE on October 11, 2024 and sell it today you would lose (1.00) from holding THAI BEVERAGE or give up 2.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
THAI BEVERAGE vs. Fukuyama Transporting Co
Performance |
| Timeline |
| THAI BEVERAGE |
| Fukuyama Transporting |
THAI BEVERAGE and Fukuyama Transporting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THAI BEVERAGE and Fukuyama Transporting
The main advantage of trading using opposite THAI BEVERAGE and Fukuyama Transporting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THAI BEVERAGE position performs unexpectedly, Fukuyama Transporting 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 Fukuyama Transporting will offset losses from the drop in Fukuyama Transporting's long position.| THAI BEVERAGE vs. TRAVEL LEISURE DL 01 | THAI BEVERAGE vs. Ebro Foods SA | THAI BEVERAGE vs. PLAYTIKA HOLDING DL 01 | THAI BEVERAGE vs. TYSON FOODS A |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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