Correlation Between THAI BEVERAGE and Webster Financial
Can any of the company-specific risk be diversified away by investing in both THAI BEVERAGE and Webster 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 Webster 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 Webster Financial, you can compare the effects of market volatilities on THAI BEVERAGE and Webster 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 Webster Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of THAI BEVERAGE and Webster Financial.
Diversification Opportunities for THAI BEVERAGE and Webster Financial
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between THAI and Webster is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding THAI BEVERAGE and Webster Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Webster 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 Webster Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Webster Financial has no effect on the direction of THAI BEVERAGE i.e., THAI BEVERAGE and Webster Financial go up and down completely randomly.
Pair Corralation between THAI BEVERAGE and Webster Financial
Assuming the 90 days trading horizon THAI BEVERAGE is expected to generate 1.17 times more return on investment than Webster Financial. However, THAI BEVERAGE is 1.17 times more volatile than Webster Financial. It trades about 0.01 of its potential returns per unit of risk. Webster Financial is currently generating about -0.08 per unit of risk. If you would invest 36.00 in THAI BEVERAGE on November 27, 2024 and sell it today you would earn a total of 0.00 from holding THAI BEVERAGE or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
THAI BEVERAGE vs. Webster Financial
Performance |
| Timeline |
| THAI BEVERAGE |
| Webster Financial |
THAI BEVERAGE and Webster Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THAI BEVERAGE and Webster Financial
The main advantage of trading using opposite THAI BEVERAGE and Webster Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THAI BEVERAGE position performs unexpectedly, Webster 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 Webster Financial will offset losses from the drop in Webster Financial's long position.| THAI BEVERAGE vs. China Foods Limited | THAI BEVERAGE vs. Datang International Power | THAI BEVERAGE vs. Thai Beverage Public | THAI BEVERAGE vs. CanSino Biologics |
| Webster Financial vs. Keck Seng Investments | Webster Financial vs. New Residential Investment | Webster Financial vs. Marie Brizard Wine | Webster Financial vs. SLR Investment Corp |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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