Correlation Between THAI BEVERAGE and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both THAI BEVERAGE and Harmony Gold 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 Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THAI BEVERAGE and Harmony Gold Mining, you can compare the effects of market volatilities on THAI BEVERAGE and Harmony Gold 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 Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of THAI BEVERAGE and Harmony Gold.
Diversification Opportunities for THAI BEVERAGE and Harmony Gold
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between THAI and Harmony is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding THAI BEVERAGE and Harmony Gold Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harmony Gold Mining 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 Harmony Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harmony Gold Mining has no effect on the direction of THAI BEVERAGE i.e., THAI BEVERAGE and Harmony Gold go up and down completely randomly.
Pair Corralation between THAI BEVERAGE and Harmony Gold
Assuming the 90 days trading horizon THAI BEVERAGE is expected to generate 0.75 times more return on investment than Harmony Gold. However, THAI BEVERAGE is 1.33 times less risky than Harmony Gold. It trades about 0.01 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.0 per unit of risk. If you would invest 36.00 in THAI BEVERAGE on August 25, 2024 and sell it today you would earn a total of 0.00 from holding THAI BEVERAGE or generate 0.0% 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. Harmony Gold Mining
Performance |
| Timeline |
| THAI BEVERAGE |
| Harmony Gold Mining |
THAI BEVERAGE and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THAI BEVERAGE and Harmony Gold
The main advantage of trading using opposite THAI BEVERAGE and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THAI BEVERAGE position performs unexpectedly, Harmony Gold 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 Harmony Gold will offset losses from the drop in Harmony Gold's long position.| THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc |
| Harmony Gold vs. The Boston Beer | Harmony Gold vs. NorAm Drilling AS | Harmony Gold vs. BORR DRILLING NEW | Harmony Gold vs. THAI BEVERAGE |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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