Correlation Between Thai Beverage and Intesa Sanpaolo
Can any of the company-specific risk be diversified away by investing in both Thai Beverage and Intesa Sanpaolo 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 Intesa Sanpaolo 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 Intesa Sanpaolo SpA, you can compare the effects of market volatilities on Thai Beverage and Intesa Sanpaolo 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 Intesa Sanpaolo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Beverage and Intesa Sanpaolo.
Diversification Opportunities for Thai Beverage and Intesa Sanpaolo
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Thai and Intesa is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Thai Beverage Public and Intesa Sanpaolo SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intesa Sanpaolo SpA 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 Intesa Sanpaolo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intesa Sanpaolo SpA has no effect on the direction of Thai Beverage i.e., Thai Beverage and Intesa Sanpaolo go up and down completely randomly.
Pair Corralation between Thai Beverage and Intesa Sanpaolo
Assuming the 90 days horizon Thai Beverage Public is expected to generate 1.74 times more return on investment than Intesa Sanpaolo. However, Thai Beverage is 1.74 times more volatile than Intesa Sanpaolo SpA. It trades about 0.22 of its potential returns per unit of risk. Intesa Sanpaolo SpA is currently generating about 0.17 per unit of risk. If you would invest 35.00 in Thai Beverage Public on September 13, 2024 and sell it today you would earn a total of 4.00 from holding Thai Beverage Public or generate 11.43% 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. Intesa Sanpaolo SpA
Performance |
| Timeline |
| Thai Beverage Public |
| Intesa Sanpaolo SpA |
Thai Beverage and Intesa Sanpaolo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Beverage and Intesa Sanpaolo
The main advantage of trading using opposite Thai Beverage and Intesa Sanpaolo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Beverage position performs unexpectedly, Intesa Sanpaolo 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 Intesa Sanpaolo will offset losses from the drop in Intesa Sanpaolo's long position.| Thai Beverage vs. Diageo plc | Thai Beverage vs. Rmy Cointreau SA | Thai Beverage vs. Treasury Wine Estates |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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