Correlation Between Thai Beverage and Thai Oil
Can any of the company-specific risk be diversified away by investing in both Thai Beverage and Thai Oil 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 Thai Oil 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 Thai Oil Public, you can compare the effects of market volatilities on Thai Beverage and Thai Oil 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 Thai Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Beverage and Thai Oil.
Diversification Opportunities for Thai Beverage and Thai Oil
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Thai and Thai is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Thai Beverage Public and Thai Oil Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Oil Public 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 Thai Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Oil Public has no effect on the direction of Thai Beverage i.e., Thai Beverage and Thai Oil go up and down completely randomly.
Pair Corralation between Thai Beverage and Thai Oil
Assuming the 90 days horizon Thai Beverage Public is expected to generate 2.54 times more return on investment than Thai Oil. However, Thai Beverage is 2.54 times more volatile than Thai Oil Public. It trades about 0.07 of its potential returns per unit of risk. Thai Oil Public is currently generating about -0.03 per unit of risk. If you would invest 19.00 in Thai Beverage Public on September 12, 2024 and sell it today you would earn a total of 20.00 from holding Thai Beverage Public or generate 105.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Thai Beverage Public vs. Thai Oil Public
Performance |
| Timeline |
| Thai Beverage Public |
| Thai Oil Public |
Thai Beverage and Thai Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Beverage and Thai Oil
The main advantage of trading using opposite Thai Beverage and Thai Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Beverage position performs unexpectedly, Thai Oil 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 Thai Oil will offset losses from the drop in Thai Oil'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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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