Correlation Between THAI BEVERAGE and State Street
Can any of the company-specific risk be diversified away by investing in both THAI BEVERAGE and State Street 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 State Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THAI BEVERAGE and State Street, you can compare the effects of market volatilities on THAI BEVERAGE and State Street 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 State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of THAI BEVERAGE and State Street.
Diversification Opportunities for THAI BEVERAGE and State Street
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between THAI and State is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding THAI BEVERAGE and State Street in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street 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 State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street has no effect on the direction of THAI BEVERAGE i.e., THAI BEVERAGE and State Street go up and down completely randomly.
Pair Corralation between THAI BEVERAGE and State Street
Assuming the 90 days trading horizon THAI BEVERAGE is expected to under-perform the State Street. In addition to that, THAI BEVERAGE is 1.09 times more volatile than State Street. It trades about -0.06 of its total potential returns per unit of risk. State Street is currently generating about 0.0 per unit of volatility. If you would invest 9,436 in State Street on November 8, 2024 and sell it today you would lose (11.00) from holding State Street or give up 0.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
THAI BEVERAGE vs. State Street
Performance |
| Timeline |
| THAI BEVERAGE |
| State Street |
THAI BEVERAGE and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THAI BEVERAGE and State Street
The main advantage of trading using opposite THAI BEVERAGE and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THAI BEVERAGE position performs unexpectedly, State Street 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 State Street will offset losses from the drop in State Street's long position.| THAI BEVERAGE vs. Transport International Holdings | THAI BEVERAGE vs. Fortescue Metals Group | THAI BEVERAGE vs. CITIC Telecom International | THAI BEVERAGE vs. TELECOM ITALIA |
| State Street vs. EAT WELL INVESTMENT | State Street vs. China National Building | State Street vs. Rayonier Advanced Materials | State Street vs. PennantPark Investment |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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