Correlation Between Thai Beverage and Nokia
Can any of the company-specific risk be diversified away by investing in both Thai Beverage and Nokia 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 Nokia 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 Nokia, you can compare the effects of market volatilities on Thai Beverage and Nokia 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 Nokia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Beverage and Nokia.
Diversification Opportunities for Thai Beverage and Nokia
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Thai and Nokia is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Thai Beverage Public and Nokia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nokia 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 Nokia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nokia has no effect on the direction of Thai Beverage i.e., Thai Beverage and Nokia go up and down completely randomly.
Pair Corralation between Thai Beverage and Nokia
Assuming the 90 days horizon Thai Beverage Public is expected to generate 1.8 times more return on investment than Nokia. However, Thai Beverage is 1.8 times more volatile than Nokia. It trades about 0.28 of its potential returns per unit of risk. Nokia is currently generating about -0.21 per unit of risk. If you would invest 35.00 in Thai Beverage Public on September 5, 2024 and sell it today you would earn a total of 6.00 from holding Thai Beverage Public or generate 17.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Thai Beverage Public vs. Nokia
Performance |
| Timeline |
| Thai Beverage Public |
| Nokia |
Thai Beverage and Nokia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Beverage and Nokia
The main advantage of trading using opposite Thai Beverage and Nokia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Beverage position performs unexpectedly, Nokia 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 Nokia will offset losses from the drop in Nokia's long position.| Thai Beverage vs. GRIFFIN MINING LTD | Thai Beverage vs. KENNAMETAL INC | Thai Beverage vs. GALENA MINING LTD | Thai Beverage vs. PARKEN Sport Entertainment |
| Nokia vs. Gladstone Investment | Nokia vs. METHODE ELECTRONICS | Nokia vs. STMICROELECTRONICS | Nokia vs. STORE ELECTRONIC |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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