Correlation Between THAI BEVERAGE and United Parcel
Can any of the company-specific risk be diversified away by investing in both THAI BEVERAGE and United Parcel 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 United Parcel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THAI BEVERAGE and United Parcel Service, you can compare the effects of market volatilities on THAI BEVERAGE and United Parcel 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 United Parcel. Check out your portfolio center. Please also check ongoing floating volatility patterns of THAI BEVERAGE and United Parcel.
Diversification Opportunities for THAI BEVERAGE and United Parcel
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between THAI and United is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding THAI BEVERAGE and United Parcel Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Parcel Service 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 United Parcel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Parcel Service has no effect on the direction of THAI BEVERAGE i.e., THAI BEVERAGE and United Parcel go up and down completely randomly.
Pair Corralation between THAI BEVERAGE and United Parcel
Assuming the 90 days trading horizon THAI BEVERAGE is expected to generate 0.47 times more return on investment than United Parcel. However, THAI BEVERAGE is 2.11 times less risky than United Parcel. It trades about -0.14 of its potential returns per unit of risk. United Parcel Service is currently generating about -0.09 per unit of risk. If you would invest 39.00 in THAI BEVERAGE on November 4, 2024 and sell it today you would lose (2.00) from holding THAI BEVERAGE or give up 5.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
THAI BEVERAGE vs. United Parcel Service
Performance |
| Timeline |
| THAI BEVERAGE |
| United Parcel Service |
THAI BEVERAGE and United Parcel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THAI BEVERAGE and United Parcel
The main advantage of trading using opposite THAI BEVERAGE and United Parcel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THAI BEVERAGE position performs unexpectedly, United Parcel 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 United Parcel will offset losses from the drop in United Parcel's long position.| THAI BEVERAGE vs. ANGANG STEEL H | THAI BEVERAGE vs. CALTAGIRONE EDITORE | THAI BEVERAGE vs. CSSC Offshore Marine | THAI BEVERAGE vs. SBM OFFSHORE |
| United Parcel vs. Deutsche Post AG | United Parcel vs. FedEx | United Parcel vs. ZTO Express | United Parcel vs. Bollor SE |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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