Correlation Between Thai Beverage and Acadia Healthcare
Can any of the company-specific risk be diversified away by investing in both Thai Beverage and Acadia Healthcare 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 Acadia Healthcare 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 Acadia Healthcare, you can compare the effects of market volatilities on Thai Beverage and Acadia Healthcare 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 Acadia Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Beverage and Acadia Healthcare.
Diversification Opportunities for Thai Beverage and Acadia Healthcare
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Thai and Acadia is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Thai Beverage Public and Acadia Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acadia Healthcare 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 Acadia Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acadia Healthcare has no effect on the direction of Thai Beverage i.e., Thai Beverage and Acadia Healthcare go up and down completely randomly.
Pair Corralation between Thai Beverage and Acadia Healthcare
Assuming the 90 days horizon Thai Beverage is expected to generate 1.25 times less return on investment than Acadia Healthcare. In addition to that, Thai Beverage is 1.74 times more volatile than Acadia Healthcare. It trades about 0.02 of its total potential returns per unit of risk. Acadia Healthcare is currently generating about 0.04 per unit of volatility. If you would invest 4,280 in Acadia Healthcare on November 7, 2024 and sell it today you would earn a total of 60.00 from holding Acadia Healthcare or generate 1.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Beverage Public vs. Acadia Healthcare
Performance |
| Timeline |
| Thai Beverage Public |
| Acadia Healthcare |
Thai Beverage and Acadia Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Beverage and Acadia Healthcare
The main advantage of trading using opposite Thai Beverage and Acadia Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Beverage position performs unexpectedly, Acadia Healthcare 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 Acadia Healthcare will offset losses from the drop in Acadia Healthcare's long position.| Thai Beverage vs. Emperor Entertainment Hotel | Thai Beverage vs. Hyatt Hotels | Thai Beverage vs. COMMERCIAL VEHICLE | Thai Beverage vs. Dalata Hotel Group |
| Acadia Healthcare vs. SMA Solar Technology | Acadia Healthcare vs. BOSTON BEER A | Acadia Healthcare vs. Thai Beverage Public | Acadia Healthcare vs. Molson Coors Beverage |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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