Correlation Between THAI BEVERAGE and Provident Financial
Can any of the company-specific risk be diversified away by investing in both THAI BEVERAGE and Provident Financial 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 Provident Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THAI BEVERAGE and Provident Financial Services, you can compare the effects of market volatilities on THAI BEVERAGE and Provident Financial 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 Provident Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of THAI BEVERAGE and Provident Financial.
Diversification Opportunities for THAI BEVERAGE and Provident Financial
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between THAI and Provident is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding THAI BEVERAGE and Provident Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Provident Financial 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 Provident Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Provident Financial has no effect on the direction of THAI BEVERAGE i.e., THAI BEVERAGE and Provident Financial go up and down completely randomly.
Pair Corralation between THAI BEVERAGE and Provident Financial
Assuming the 90 days trading horizon THAI BEVERAGE is expected to generate 1.59 times more return on investment than Provident Financial. However, THAI BEVERAGE is 1.59 times more volatile than Provident Financial Services. It trades about 0.11 of its potential returns per unit of risk. Provident Financial Services is currently generating about -0.11 per unit of risk. If you would invest 36.00 in THAI BEVERAGE on September 14, 2024 and sell it today you would earn a total of 2.00 from holding THAI BEVERAGE or generate 5.56% 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. Provident Financial Services
Performance |
| Timeline |
| THAI BEVERAGE |
| Provident Financial |
THAI BEVERAGE and Provident Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THAI BEVERAGE and Provident Financial
The main advantage of trading using opposite THAI BEVERAGE and Provident Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THAI BEVERAGE position performs unexpectedly, Provident Financial 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 Provident Financial will offset losses from the drop in Provident Financial's long position.| THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc |
| Provident Financial vs. New York Community | Provident Financial vs. Northwest Bancshares | Provident Financial vs. Territorial Bancorp |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| 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 | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |