Correlation Between THAI BEVERAGE and Virtus Investment
Can any of the company-specific risk be diversified away by investing in both THAI BEVERAGE and Virtus Investment 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 Virtus Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THAI BEVERAGE and Virtus Investment Partners, you can compare the effects of market volatilities on THAI BEVERAGE and Virtus Investment 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 Virtus Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of THAI BEVERAGE and Virtus Investment.
Diversification Opportunities for THAI BEVERAGE and Virtus Investment
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between THAI and Virtus is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding THAI BEVERAGE and Virtus Investment Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Investment 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 Virtus Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Investment has no effect on the direction of THAI BEVERAGE i.e., THAI BEVERAGE and Virtus Investment go up and down completely randomly.
Pair Corralation between THAI BEVERAGE and Virtus Investment
Assuming the 90 days trading horizon THAI BEVERAGE is expected to generate 0.85 times more return on investment than Virtus Investment. However, THAI BEVERAGE is 1.18 times less risky than Virtus Investment. It trades about -0.08 of its potential returns per unit of risk. Virtus Investment Partners is currently generating about -0.31 per unit of risk. If you would invest 37.00 in THAI BEVERAGE on October 19, 2024 and sell it today you would lose (1.00) from holding THAI BEVERAGE or give up 2.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
THAI BEVERAGE vs. Virtus Investment Partners
Performance |
| Timeline |
| THAI BEVERAGE |
| Virtus Investment |
THAI BEVERAGE and Virtus Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THAI BEVERAGE and Virtus Investment
The main advantage of trading using opposite THAI BEVERAGE and Virtus Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THAI BEVERAGE position performs unexpectedly, Virtus Investment 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 Virtus Investment will offset losses from the drop in Virtus Investment's long position.| THAI BEVERAGE vs. Waste Management | THAI BEVERAGE vs. Vulcan Materials | THAI BEVERAGE vs. Sumitomo Rubber Industries | THAI BEVERAGE vs. CeoTronics AG |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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