Correlation Between THAI BEVERAGE and MARKET VECTR
Can any of the company-specific risk be diversified away by investing in both THAI BEVERAGE and MARKET VECTR 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 MARKET VECTR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THAI BEVERAGE and MARKET VECTR RETAIL, you can compare the effects of market volatilities on THAI BEVERAGE and MARKET VECTR 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 MARKET VECTR. Check out your portfolio center. Please also check ongoing floating volatility patterns of THAI BEVERAGE and MARKET VECTR.
Diversification Opportunities for THAI BEVERAGE and MARKET VECTR
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between THAI and MARKET is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding THAI BEVERAGE and MARKET VECTR RETAIL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MARKET VECTR RETAIL 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 MARKET VECTR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MARKET VECTR RETAIL has no effect on the direction of THAI BEVERAGE i.e., THAI BEVERAGE and MARKET VECTR go up and down completely randomly.
Pair Corralation between THAI BEVERAGE and MARKET VECTR
Assuming the 90 days trading horizon THAI BEVERAGE is expected to under-perform the MARKET VECTR. In addition to that, THAI BEVERAGE is 2.49 times more volatile than MARKET VECTR RETAIL. It trades about -0.08 of its total potential returns per unit of risk. MARKET VECTR RETAIL is currently generating about 0.14 per unit of volatility. If you would invest 22,045 in MARKET VECTR RETAIL on October 20, 2024 and sell it today you would earn a total of 385.00 from holding MARKET VECTR RETAIL or generate 1.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
THAI BEVERAGE vs. MARKET VECTR RETAIL
Performance |
| Timeline |
| THAI BEVERAGE |
| MARKET VECTR RETAIL |
THAI BEVERAGE and MARKET VECTR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THAI BEVERAGE and MARKET VECTR
The main advantage of trading using opposite THAI BEVERAGE and MARKET VECTR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THAI BEVERAGE position performs unexpectedly, MARKET VECTR 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 MARKET VECTR will offset losses from the drop in MARKET VECTR's long position.| THAI BEVERAGE vs. ASURE SOFTWARE | THAI BEVERAGE vs. Take Two Interactive Software | THAI BEVERAGE vs. CyberArk Software | THAI BEVERAGE vs. ADDUS HOMECARE |
| MARKET VECTR vs. Japan Tobacco | MARKET VECTR vs. VITEC SOFTWARE GROUP | MARKET VECTR vs. Kingdee International Software | MARKET VECTR vs. CARSALESCOM |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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