Correlation Between THAI BEVERAGE and Marks
Can any of the company-specific risk be diversified away by investing in both THAI BEVERAGE and Marks 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 Marks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THAI BEVERAGE and Marks and Spencer, you can compare the effects of market volatilities on THAI BEVERAGE and Marks 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 Marks. Check out your portfolio center. Please also check ongoing floating volatility patterns of THAI BEVERAGE and Marks.
Diversification Opportunities for THAI BEVERAGE and Marks
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between THAI and Marks is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding THAI BEVERAGE and Marks and Spencer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marks and Spencer 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 Marks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marks and Spencer has no effect on the direction of THAI BEVERAGE i.e., THAI BEVERAGE and Marks go up and down completely randomly.
Pair Corralation between THAI BEVERAGE and Marks
Assuming the 90 days trading horizon THAI BEVERAGE is expected to generate 1.25 times more return on investment than Marks. However, THAI BEVERAGE is 1.25 times more volatile than Marks and Spencer. It trades about -0.08 of its potential returns per unit of risk. Marks and Spencer is currently generating about -0.11 per unit of risk. If you would invest 38.00 in THAI BEVERAGE on October 10, 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
THAI BEVERAGE vs. Marks and Spencer
Performance |
| Timeline |
| THAI BEVERAGE |
| Marks and Spencer |
THAI BEVERAGE and Marks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THAI BEVERAGE and Marks
The main advantage of trading using opposite THAI BEVERAGE and Marks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THAI BEVERAGE position performs unexpectedly, Marks 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 Marks will offset losses from the drop in Marks' long position.| THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc |
| Marks vs. MIRAMAR HOTEL INV | Marks vs. TRADEDOUBLER AB SK | Marks vs. Fast Retailing Co | Marks vs. Choice Hotels International |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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