Correlation Between THAI BEVERAGE and SOLSTAD OFFSHORE
Can any of the company-specific risk be diversified away by investing in both THAI BEVERAGE and SOLSTAD OFFSHORE 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 SOLSTAD OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THAI BEVERAGE and SOLSTAD OFFSHORE NK, you can compare the effects of market volatilities on THAI BEVERAGE and SOLSTAD OFFSHORE 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 SOLSTAD OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of THAI BEVERAGE and SOLSTAD OFFSHORE.
Diversification Opportunities for THAI BEVERAGE and SOLSTAD OFFSHORE
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between THAI and SOLSTAD is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding THAI BEVERAGE and SOLSTAD OFFSHORE NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOLSTAD OFFSHORE 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 SOLSTAD OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOLSTAD OFFSHORE has no effect on the direction of THAI BEVERAGE i.e., THAI BEVERAGE and SOLSTAD OFFSHORE go up and down completely randomly.
Pair Corralation between THAI BEVERAGE and SOLSTAD OFFSHORE
Assuming the 90 days trading horizon THAI BEVERAGE is expected to generate 1.18 times more return on investment than SOLSTAD OFFSHORE. However, THAI BEVERAGE is 1.18 times more volatile than SOLSTAD OFFSHORE NK. It trades about 0.06 of its potential returns per unit of risk. SOLSTAD OFFSHORE NK is currently generating about 0.03 per unit of risk. If you would invest 14.00 in THAI BEVERAGE on August 29, 2024 and sell it today you would earn a total of 24.00 from holding THAI BEVERAGE or generate 171.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
THAI BEVERAGE vs. SOLSTAD OFFSHORE NK
Performance |
| Timeline |
| THAI BEVERAGE |
| SOLSTAD OFFSHORE |
THAI BEVERAGE and SOLSTAD OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THAI BEVERAGE and SOLSTAD OFFSHORE
The main advantage of trading using opposite THAI BEVERAGE and SOLSTAD OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THAI BEVERAGE position performs unexpectedly, SOLSTAD OFFSHORE 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 SOLSTAD OFFSHORE will offset losses from the drop in SOLSTAD OFFSHORE's long position.| THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Superior Plus Corp | THAI BEVERAGE vs. SIVERS SEMICONDUCTORS AB |
| SOLSTAD OFFSHORE vs. ZIM Integrated Shipping | SOLSTAD OFFSHORE vs. Superior Plus Corp | SOLSTAD OFFSHORE vs. NMI Holdings | SOLSTAD OFFSHORE vs. SIVERS SEMICONDUCTORS AB |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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