Correlation Between Thai Beverage and CDN IMPERIAL
Can any of the company-specific risk be diversified away by investing in both Thai Beverage and CDN IMPERIAL 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 CDN IMPERIAL 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 CDN IMPERIAL BANK, you can compare the effects of market volatilities on Thai Beverage and CDN IMPERIAL 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 CDN IMPERIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Beverage and CDN IMPERIAL.
Diversification Opportunities for Thai Beverage and CDN IMPERIAL
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Thai and CDN is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Thai Beverage Public and CDN IMPERIAL BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDN IMPERIAL BANK 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 CDN IMPERIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDN IMPERIAL BANK has no effect on the direction of Thai Beverage i.e., Thai Beverage and CDN IMPERIAL go up and down completely randomly.
Pair Corralation between Thai Beverage and CDN IMPERIAL
Assuming the 90 days horizon Thai Beverage Public is expected to generate 1.85 times more return on investment than CDN IMPERIAL. However, Thai Beverage is 1.85 times more volatile than CDN IMPERIAL BANK. It trades about -0.04 of its potential returns per unit of risk. CDN IMPERIAL BANK is currently generating about -0.09 per unit of risk. If you would invest 36.00 in Thai Beverage Public on November 27, 2024 and sell it today you would lose (1.00) from holding Thai Beverage Public or give up 2.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Beverage Public vs. CDN IMPERIAL BANK
Performance |
| Timeline |
| Thai Beverage Public |
| CDN IMPERIAL BANK |
Thai Beverage and CDN IMPERIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Beverage and CDN IMPERIAL
The main advantage of trading using opposite Thai Beverage and CDN IMPERIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Beverage position performs unexpectedly, CDN IMPERIAL 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 CDN IMPERIAL will offset losses from the drop in CDN IMPERIAL's long position.| Thai Beverage vs. MidCap Financial Investment | Thai Beverage vs. UNIVMUSIC GRPADR050 | Thai Beverage vs. Keck Seng Investments | Thai Beverage vs. CHRYSALIS INVESTMENTS LTD |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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