Correlation Between Thai Beverage and CGN Power
Can any of the company-specific risk be diversified away by investing in both Thai Beverage and CGN Power 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 CGN Power 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 CGN Power Co, you can compare the effects of market volatilities on Thai Beverage and CGN Power 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 CGN Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Beverage and CGN Power.
Diversification Opportunities for Thai Beverage and CGN Power
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Thai and CGN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Thai Beverage Public and CGN Power Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CGN Power 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 CGN Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CGN Power has no effect on the direction of Thai Beverage i.e., Thai Beverage and CGN Power go up and down completely randomly.
Pair Corralation between Thai Beverage and CGN Power
Assuming the 90 days horizon Thai Beverage is expected to generate 3.08 times less return on investment than CGN Power. But when comparing it to its historical volatility, Thai Beverage Public is 2.07 times less risky than CGN Power. It trades about 0.05 of its potential returns per unit of risk. CGN Power Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 6.91 in CGN Power Co on October 28, 2024 and sell it today you would earn a total of 21.09 from holding CGN Power Co or generate 305.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Thai Beverage Public vs. CGN Power Co
Performance |
| Timeline |
| Thai Beverage Public |
| CGN Power |
Thai Beverage and CGN Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Beverage and CGN Power
The main advantage of trading using opposite Thai Beverage and CGN Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Beverage position performs unexpectedly, CGN Power 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 CGN Power will offset losses from the drop in CGN Power's long position.| Thai Beverage vs. JAPAN AIRLINES | Thai Beverage vs. Cal Maine Foods | Thai Beverage vs. Ebro Foods SA | Thai Beverage vs. PURE FOODS TASMANIA |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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