Correlation Between Thai Beverage and EBRO FOODS
Can any of the company-specific risk be diversified away by investing in both Thai Beverage and EBRO FOODS 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 EBRO FOODS 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 EBRO FOODS, you can compare the effects of market volatilities on Thai Beverage and EBRO FOODS 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 EBRO FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Beverage and EBRO FOODS.
Diversification Opportunities for Thai Beverage and EBRO FOODS
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Thai and EBRO is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Thai Beverage Public and EBRO FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EBRO FOODS 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 EBRO FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EBRO FOODS has no effect on the direction of Thai Beverage i.e., Thai Beverage and EBRO FOODS go up and down completely randomly.
Pair Corralation between Thai Beverage and EBRO FOODS
Assuming the 90 days horizon Thai Beverage Public is expected to generate 4.0 times more return on investment than EBRO FOODS. However, Thai Beverage is 4.0 times more volatile than EBRO FOODS. It trades about 0.06 of its potential returns per unit of risk. EBRO FOODS is currently generating about 0.02 per unit of risk. If you would invest 15.00 in Thai Beverage Public on November 6, 2024 and sell it today you would earn a total of 23.00 from holding Thai Beverage Public or generate 153.33% 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. EBRO FOODS
Performance |
| Timeline |
| Thai Beverage Public |
| EBRO FOODS |
Thai Beverage and EBRO FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Beverage and EBRO FOODS
The main advantage of trading using opposite Thai Beverage and EBRO FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Beverage position performs unexpectedly, EBRO FOODS 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 EBRO FOODS will offset losses from the drop in EBRO FOODS's long position.| Thai Beverage vs. COMMERCIAL VEHICLE | Thai Beverage vs. CARSALESCOM | Thai Beverage vs. GRUPO CARSO A1 | Thai Beverage vs. RYANAIR HLDGS ADR |
| EBRO FOODS vs. GALENA MINING LTD | EBRO FOODS vs. Harmony Gold Mining | EBRO FOODS vs. OFFICE DEPOT | EBRO FOODS vs. Urban Outfitters |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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