Correlation Between Thai Beverage and Hawesko Holding
Can any of the company-specific risk be diversified away by investing in both Thai Beverage and Hawesko Holding 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 Hawesko Holding 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 Hawesko Holding AG, you can compare the effects of market volatilities on Thai Beverage and Hawesko Holding 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 Hawesko Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Beverage and Hawesko Holding.
Diversification Opportunities for Thai Beverage and Hawesko Holding
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Thai and Hawesko is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Thai Beverage Public and Hawesko Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawesko Holding AG 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 Hawesko Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawesko Holding AG has no effect on the direction of Thai Beverage i.e., Thai Beverage and Hawesko Holding go up and down completely randomly.
Pair Corralation between Thai Beverage and Hawesko Holding
Assuming the 90 days horizon Thai Beverage Public is expected to generate 2.8 times more return on investment than Hawesko Holding. However, Thai Beverage is 2.8 times more volatile than Hawesko Holding AG. It trades about 0.05 of its potential returns per unit of risk. Hawesko Holding AG is currently generating about -0.04 per unit of risk. If you would invest 16.00 in Thai Beverage Public on September 12, 2024 and sell it today you would earn a total of 22.00 from holding Thai Beverage Public or generate 137.5% 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. Hawesko Holding AG
Performance |
| Timeline |
| Thai Beverage Public |
| Hawesko Holding AG |
Thai Beverage and Hawesko Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Beverage and Hawesko Holding
The main advantage of trading using opposite Thai Beverage and Hawesko Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Beverage position performs unexpectedly, Hawesko Holding 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 Hawesko Holding will offset losses from the drop in Hawesko Holding's long position.| Thai Beverage vs. Diageo plc | Thai Beverage vs. Rmy Cointreau SA | Thai Beverage vs. Treasury Wine Estates |
| Hawesko Holding vs. Diageo plc | Hawesko Holding vs. Thai Beverage Public | Hawesko Holding vs. Rmy Cointreau SA | Hawesko Holding vs. Treasury Wine Estates |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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