Correlation Between Thai Beverage and DATAGROUP
Can any of the company-specific risk be diversified away by investing in both Thai Beverage and DATAGROUP 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 DATAGROUP 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 DATAGROUP SE, you can compare the effects of market volatilities on Thai Beverage and DATAGROUP 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 DATAGROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Beverage and DATAGROUP.
Diversification Opportunities for Thai Beverage and DATAGROUP
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Thai and DATAGROUP is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Thai Beverage Public and DATAGROUP SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DATAGROUP SE 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 DATAGROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DATAGROUP SE has no effect on the direction of Thai Beverage i.e., Thai Beverage and DATAGROUP go up and down completely randomly.
Pair Corralation between Thai Beverage and DATAGROUP
Assuming the 90 days horizon Thai Beverage is expected to generate 2.67 times less return on investment than DATAGROUP. But when comparing it to its historical volatility, Thai Beverage Public is 1.19 times less risky than DATAGROUP. It trades about 0.06 of its potential returns per unit of risk. DATAGROUP SE is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 4,165 in DATAGROUP SE on August 31, 2024 and sell it today you would earn a total of 365.00 from holding DATAGROUP SE or generate 8.76% 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. DATAGROUP SE
Performance |
| Timeline |
| Thai Beverage Public |
| DATAGROUP SE |
Thai Beverage and DATAGROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Beverage and DATAGROUP
The main advantage of trading using opposite Thai Beverage and DATAGROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Beverage position performs unexpectedly, DATAGROUP 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 DATAGROUP will offset losses from the drop in DATAGROUP's long position.| Thai Beverage vs. DOCDATA | Thai Beverage vs. Cass Information Systems | Thai Beverage vs. INFORMATION SVC GRP | Thai Beverage vs. PUBLIC STORAGE PRFO |
| DATAGROUP vs. Sumitomo Mitsui Construction | DATAGROUP vs. Sumitomo Rubber Industries | DATAGROUP vs. AUST AGRICULTURAL | DATAGROUP vs. Compagnie Plastic Omnium |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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