Correlation Between Thai Beverage and SWISS WATER
Can any of the company-specific risk be diversified away by investing in both Thai Beverage and SWISS WATER 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 SWISS WATER 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 SWISS WATER DECAFFCOFFEE, you can compare the effects of market volatilities on Thai Beverage and SWISS WATER 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 SWISS WATER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Beverage and SWISS WATER.
Diversification Opportunities for Thai Beverage and SWISS WATER
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Thai and SWISS is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Thai Beverage Public and SWISS WATER DECAFFCOFFEE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SWISS WATER DECAFFCOFFEE 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 SWISS WATER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SWISS WATER DECAFFCOFFEE has no effect on the direction of Thai Beverage i.e., Thai Beverage and SWISS WATER go up and down completely randomly.
Pair Corralation between Thai Beverage and SWISS WATER
Assuming the 90 days horizon Thai Beverage is expected to generate 1.9 times less return on investment than SWISS WATER. In addition to that, Thai Beverage is 1.14 times more volatile than SWISS WATER DECAFFCOFFEE. It trades about 0.06 of its total potential returns per unit of risk. SWISS WATER DECAFFCOFFEE is currently generating about 0.13 per unit of volatility. If you would invest 252.00 in SWISS WATER DECAFFCOFFEE on August 31, 2024 and sell it today you would earn a total of 16.00 from holding SWISS WATER DECAFFCOFFEE or generate 6.35% 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. SWISS WATER DECAFFCOFFEE
Performance |
| Timeline |
| Thai Beverage Public |
| SWISS WATER DECAFFCOFFEE |
Thai Beverage and SWISS WATER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Beverage and SWISS WATER
The main advantage of trading using opposite Thai Beverage and SWISS WATER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Beverage position performs unexpectedly, SWISS WATER 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 SWISS WATER will offset losses from the drop in SWISS WATER's long position.| Thai Beverage vs. DOCDATA | Thai Beverage vs. Cass Information Systems | Thai Beverage vs. INFORMATION SVC GRP | Thai Beverage vs. PUBLIC STORAGE PRFO |
| SWISS WATER vs. Pure Storage | SWISS WATER vs. DICKER DATA LTD | SWISS WATER vs. DATANG INTL POW | SWISS WATER vs. Public Storage |
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 Stocks Directory module to find actively traded stocks across global markets.
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