Correlation Between THAI BEVERAGE and GOODYEAR T
Can any of the company-specific risk be diversified away by investing in both THAI BEVERAGE and GOODYEAR T 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 GOODYEAR T into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THAI BEVERAGE and GOODYEAR T RUBBER, you can compare the effects of market volatilities on THAI BEVERAGE and GOODYEAR T 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 GOODYEAR T. Check out your portfolio center. Please also check ongoing floating volatility patterns of THAI BEVERAGE and GOODYEAR T.
Diversification Opportunities for THAI BEVERAGE and GOODYEAR T
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between THAI and GOODYEAR is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding THAI BEVERAGE and GOODYEAR T RUBBER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOODYEAR T RUBBER 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 GOODYEAR T. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOODYEAR T RUBBER has no effect on the direction of THAI BEVERAGE i.e., THAI BEVERAGE and GOODYEAR T go up and down completely randomly.
Pair Corralation between THAI BEVERAGE and GOODYEAR T
Assuming the 90 days trading horizon THAI BEVERAGE is expected to generate 16.08 times less return on investment than GOODYEAR T. But when comparing it to its historical volatility, THAI BEVERAGE is 1.08 times less risky than GOODYEAR T. It trades about 0.01 of its potential returns per unit of risk. GOODYEAR T RUBBER is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 841.00 in GOODYEAR T RUBBER on October 25, 2024 and sell it today you would earn a total of 37.00 from holding GOODYEAR T RUBBER or generate 4.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
THAI BEVERAGE vs. GOODYEAR T RUBBER
Performance |
| Timeline |
| THAI BEVERAGE |
| GOODYEAR T RUBBER |
THAI BEVERAGE and GOODYEAR T Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THAI BEVERAGE and GOODYEAR T
The main advantage of trading using opposite THAI BEVERAGE and GOODYEAR T positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THAI BEVERAGE position performs unexpectedly, GOODYEAR T 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 GOODYEAR T will offset losses from the drop in GOODYEAR T's long position.| THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc |
| GOODYEAR T vs. ANTA SPORTS PRODUCT | GOODYEAR T vs. THAI BEVERAGE | GOODYEAR T vs. TreeHouse Foods | GOODYEAR T vs. CAL MAINE FOODS |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |