Correlation Between Thai Beverage and BANK RAKYAT
Can any of the company-specific risk be diversified away by investing in both Thai Beverage and BANK RAKYAT 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 BANK RAKYAT 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 BANK RAKYAT IND, you can compare the effects of market volatilities on Thai Beverage and BANK RAKYAT 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 BANK RAKYAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Beverage and BANK RAKYAT.
Diversification Opportunities for Thai Beverage and BANK RAKYAT
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Thai and BANK is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Thai Beverage Public and BANK RAKYAT IND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK RAKYAT IND 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 BANK RAKYAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK RAKYAT IND has no effect on the direction of Thai Beverage i.e., Thai Beverage and BANK RAKYAT go up and down completely randomly.
Pair Corralation between Thai Beverage and BANK RAKYAT
Assuming the 90 days horizon Thai Beverage Public is expected to generate 1.74 times more return on investment than BANK RAKYAT. However, Thai Beverage is 1.74 times more volatile than BANK RAKYAT IND. It trades about 0.02 of its potential returns per unit of risk. BANK RAKYAT IND is currently generating about -0.06 per unit of risk. If you would invest 35.00 in Thai Beverage Public on November 9, 2024 and sell it today you would earn a total of 2.00 from holding Thai Beverage Public or generate 5.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Beverage Public vs. BANK RAKYAT IND
Performance |
| Timeline |
| Thai Beverage Public |
| BANK RAKYAT IND |
Thai Beverage and BANK RAKYAT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Beverage and BANK RAKYAT
The main advantage of trading using opposite Thai Beverage and BANK RAKYAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Beverage position performs unexpectedly, BANK RAKYAT 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 BANK RAKYAT will offset losses from the drop in BANK RAKYAT's long position.| Thai Beverage vs. Perseus Mining Limited | Thai Beverage vs. Coeur Mining | Thai Beverage vs. CORNISH METALS INC | Thai Beverage vs. GALENA MINING LTD |
| BANK RAKYAT vs. Aluminum of | BANK RAKYAT vs. Warner Music Group | BANK RAKYAT vs. Beta Systems Software | BANK RAKYAT vs. DXC Technology Co |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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