Correlation Between Thai Beverage and Materialise
Can any of the company-specific risk be diversified away by investing in both Thai Beverage and Materialise 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 Materialise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thai Beverage Public and Materialise NV, you can compare the effects of market volatilities on Thai Beverage and Materialise 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 Materialise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Beverage and Materialise.
Diversification Opportunities for Thai Beverage and Materialise
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Thai and Materialise is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Thai Beverage Public and Materialise NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materialise NV 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 Public are associated (or correlated) with Materialise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Materialise NV has no effect on the direction of Thai Beverage i.e., Thai Beverage and Materialise go up and down completely randomly.
Pair Corralation between Thai Beverage and Materialise
Assuming the 90 days horizon Thai Beverage Public is expected to generate 1.8 times more return on investment than Materialise. However, Thai Beverage is 1.8 times more volatile than Materialise NV. It trades about 0.05 of its potential returns per unit of risk. Materialise NV is currently generating about 0.01 per unit of risk. If you would invest 16.00 in Thai Beverage Public on September 23, 2024 and sell it today you would earn a total of 22.00 from holding Thai Beverage Public or generate 137.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Beverage Public vs. Materialise NV
Performance |
| Timeline |
| Thai Beverage Public |
| Materialise NV |
Thai Beverage and Materialise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Beverage and Materialise
The main advantage of trading using opposite Thai Beverage and Materialise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Beverage position performs unexpectedly, Materialise 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 Materialise will offset losses from the drop in Materialise's long position.| Thai Beverage vs. Diageo plc | Thai Beverage vs. Pernod Ricard SA | Thai Beverage vs. Constellation Brands | Thai Beverage vs. Brown Forman |
| Materialise vs. NEWELL RUBBERMAID | Materialise vs. National Beverage Corp | Materialise vs. VULCAN MATERIALS | Materialise vs. Thai Beverage Public |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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