Correlation Between THAI BEVERAGE and QINGCI GAMES
Can any of the company-specific risk be diversified away by investing in both THAI BEVERAGE and QINGCI GAMES 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 QINGCI GAMES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THAI BEVERAGE and QINGCI GAMES INC, you can compare the effects of market volatilities on THAI BEVERAGE and QINGCI GAMES 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 QINGCI GAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of THAI BEVERAGE and QINGCI GAMES.
Diversification Opportunities for THAI BEVERAGE and QINGCI GAMES
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between THAI and QINGCI is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding THAI BEVERAGE and QINGCI GAMES INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QINGCI GAMES INC 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 QINGCI GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QINGCI GAMES INC has no effect on the direction of THAI BEVERAGE i.e., THAI BEVERAGE and QINGCI GAMES go up and down completely randomly.
Pair Corralation between THAI BEVERAGE and QINGCI GAMES
Assuming the 90 days trading horizon THAI BEVERAGE is expected to generate 1.72 times more return on investment than QINGCI GAMES. However, THAI BEVERAGE is 1.72 times more volatile than QINGCI GAMES INC. It trades about 0.07 of its potential returns per unit of risk. QINGCI GAMES INC is currently generating about -0.03 per unit of risk. If you would invest 19.00 in THAI BEVERAGE on November 3, 2024 and sell it today you would earn a total of 18.00 from holding THAI BEVERAGE or generate 94.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
THAI BEVERAGE vs. QINGCI GAMES INC
Performance |
| Timeline |
| THAI BEVERAGE |
| QINGCI GAMES INC |
THAI BEVERAGE and QINGCI GAMES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THAI BEVERAGE and QINGCI GAMES
The main advantage of trading using opposite THAI BEVERAGE and QINGCI GAMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THAI BEVERAGE position performs unexpectedly, QINGCI GAMES 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 QINGCI GAMES will offset losses from the drop in QINGCI GAMES's long position.| THAI BEVERAGE vs. New Residential Investment | THAI BEVERAGE vs. Scottish Mortgage Investment | THAI BEVERAGE vs. G III APPAREL GROUP | THAI BEVERAGE vs. Guangdong Investment Limited |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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