Correlation Between Thai Beverage and FIRST SAVINGS
Can any of the company-specific risk be diversified away by investing in both Thai Beverage and FIRST SAVINGS 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 FIRST SAVINGS 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 FIRST SAVINGS FINL, you can compare the effects of market volatilities on Thai Beverage and FIRST SAVINGS 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 FIRST SAVINGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Beverage and FIRST SAVINGS.
Diversification Opportunities for Thai Beverage and FIRST SAVINGS
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Thai and FIRST is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Thai Beverage Public and FIRST SAVINGS FINL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIRST SAVINGS FINL 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 FIRST SAVINGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIRST SAVINGS FINL has no effect on the direction of Thai Beverage i.e., Thai Beverage and FIRST SAVINGS go up and down completely randomly.
Pair Corralation between Thai Beverage and FIRST SAVINGS
Assuming the 90 days horizon Thai Beverage Public is expected to generate 1.02 times more return on investment than FIRST SAVINGS. However, Thai Beverage is 1.02 times more volatile than FIRST SAVINGS FINL. It trades about 0.01 of its potential returns per unit of risk. FIRST SAVINGS FINL is currently generating about -0.18 per unit of risk. If you would invest 39.00 in Thai Beverage Public on October 12, 2024 and sell it today you would earn a total of 0.00 from holding Thai Beverage Public or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Beverage Public vs. FIRST SAVINGS FINL
Performance |
| Timeline |
| Thai Beverage Public |
| FIRST SAVINGS FINL |
Thai Beverage and FIRST SAVINGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Beverage and FIRST SAVINGS
The main advantage of trading using opposite Thai Beverage and FIRST SAVINGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Beverage position performs unexpectedly, FIRST SAVINGS 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 FIRST SAVINGS will offset losses from the drop in FIRST SAVINGS's long position.| Thai Beverage vs. RCS MediaGroup SpA | Thai Beverage vs. GAMESTOP | Thai Beverage vs. Live Nation Entertainment | Thai Beverage vs. SQUIRREL MEDIA SA |
| FIRST SAVINGS vs. CITY OFFICE REIT | FIRST SAVINGS vs. Aedas Homes SA | FIRST SAVINGS vs. Diamyd Medical AB | FIRST SAVINGS vs. Neinor Homes SA |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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