Correlation Between Thai Beverage and Komatsu
Can any of the company-specific risk be diversified away by investing in both Thai Beverage and Komatsu 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 Komatsu 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 Komatsu, you can compare the effects of market volatilities on Thai Beverage and Komatsu 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 Komatsu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Beverage and Komatsu.
Diversification Opportunities for Thai Beverage and Komatsu
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Thai and Komatsu is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Thai Beverage Public and Komatsu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Komatsu 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 Komatsu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Komatsu has no effect on the direction of Thai Beverage i.e., Thai Beverage and Komatsu go up and down completely randomly.
Pair Corralation between Thai Beverage and Komatsu
Assuming the 90 days horizon Thai Beverage Public is expected to generate 3.12 times more return on investment than Komatsu. However, Thai Beverage is 3.12 times more volatile than Komatsu. It trades about 0.05 of its potential returns per unit of risk. Komatsu is currently generating about 0.03 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 Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Beverage Public vs. Komatsu
Performance |
| Timeline |
| Thai Beverage Public |
| Komatsu |
Thai Beverage and Komatsu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Beverage and Komatsu
The main advantage of trading using opposite Thai Beverage and Komatsu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Beverage position performs unexpectedly, Komatsu 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 Komatsu will offset losses from the drop in Komatsu's long position.| Thai Beverage vs. Diageo plc | Thai Beverage vs. Rmy Cointreau SA | Thai Beverage vs. Treasury Wine Estates |
| Komatsu vs. Gold Road Resources | Komatsu vs. Transport International Holdings | Komatsu vs. Air Transport Services | Komatsu vs. Thai Beverage Public |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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