Correlation Between Thai Beverage and NISSHA CO
Can any of the company-specific risk be diversified away by investing in both Thai Beverage and NISSHA CO 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 NISSHA CO 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 NISSHA LTD, you can compare the effects of market volatilities on Thai Beverage and NISSHA CO 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 NISSHA CO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Beverage and NISSHA CO.
Diversification Opportunities for Thai Beverage and NISSHA CO
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Thai and NISSHA is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Thai Beverage Public and NISSHA LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NISSHA LTD 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 NISSHA CO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NISSHA LTD has no effect on the direction of Thai Beverage i.e., Thai Beverage and NISSHA CO go up and down completely randomly.
Pair Corralation between Thai Beverage and NISSHA CO
Assuming the 90 days horizon Thai Beverage Public is expected to under-perform the NISSHA CO. In addition to that, Thai Beverage is 2.93 times more volatile than NISSHA LTD. It trades about -0.05 of its total potential returns per unit of risk. NISSHA LTD is currently generating about 0.13 per unit of volatility. If you would invest 940.00 in NISSHA LTD on October 21, 2024 and sell it today you would earn a total of 30.00 from holding NISSHA LTD or generate 3.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Beverage Public vs. NISSHA LTD
Performance |
| Timeline |
| Thai Beverage Public |
| NISSHA LTD |
Thai Beverage and NISSHA CO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Beverage and NISSHA CO
The main advantage of trading using opposite Thai Beverage and NISSHA CO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Beverage position performs unexpectedly, NISSHA CO 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 NISSHA CO will offset losses from the drop in NISSHA CO's long position.| Thai Beverage vs. EAT WELL INVESTMENT | Thai Beverage vs. Sumitomo Mitsui Construction | Thai Beverage vs. Chongqing Machinery Electric | Thai Beverage vs. PennantPark Investment |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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