Correlation Between Thai Beverage and KAUFMAN ET
Can any of the company-specific risk be diversified away by investing in both Thai Beverage and KAUFMAN ET 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 KAUFMAN ET 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 KAUFMAN ET BROAD, you can compare the effects of market volatilities on Thai Beverage and KAUFMAN ET 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 KAUFMAN ET. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Beverage and KAUFMAN ET.
Diversification Opportunities for Thai Beverage and KAUFMAN ET
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Thai and KAUFMAN is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Thai Beverage Public and KAUFMAN ET BROAD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KAUFMAN ET BROAD 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 KAUFMAN ET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KAUFMAN ET BROAD has no effect on the direction of Thai Beverage i.e., Thai Beverage and KAUFMAN ET go up and down completely randomly.
Pair Corralation between Thai Beverage and KAUFMAN ET
Assuming the 90 days horizon Thai Beverage Public is expected to generate 1.82 times more return on investment than KAUFMAN ET. However, Thai Beverage is 1.82 times more volatile than KAUFMAN ET BROAD. It trades about 0.07 of its potential returns per unit of risk. KAUFMAN ET BROAD is currently generating about -0.01 per unit of risk. If you would invest 35.00 in Thai Beverage Public on September 2, 2024 and sell it today you would earn a total of 4.00 from holding Thai Beverage Public or generate 11.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Beverage Public vs. KAUFMAN ET BROAD
Performance |
| Timeline |
| Thai Beverage Public |
| KAUFMAN ET BROAD |
Thai Beverage and KAUFMAN ET Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Beverage and KAUFMAN ET
The main advantage of trading using opposite Thai Beverage and KAUFMAN ET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Beverage position performs unexpectedly, KAUFMAN ET 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 KAUFMAN ET will offset losses from the drop in KAUFMAN ET's long position.The idea behind Thai Beverage Public and KAUFMAN ET BROAD pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| KAUFMAN ET vs. SIVERS SEMICONDUCTORS AB | KAUFMAN ET vs. Darden Restaurants | KAUFMAN ET vs. Reliance Steel Aluminum | KAUFMAN ET vs. Q2M Managementberatung AG |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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