Correlation Between Thai Beverage and NetSol Technologies
Can any of the company-specific risk be diversified away by investing in both Thai Beverage and NetSol Technologies 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 NetSol Technologies 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 NetSol Technologies, you can compare the effects of market volatilities on Thai Beverage and NetSol Technologies 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 NetSol Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Beverage and NetSol Technologies.
Diversification Opportunities for Thai Beverage and NetSol Technologies
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Thai and NetSol is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Thai Beverage Public and NetSol Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetSol Technologies 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 NetSol Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NetSol Technologies has no effect on the direction of Thai Beverage i.e., Thai Beverage and NetSol Technologies go up and down completely randomly.
Pair Corralation between Thai Beverage and NetSol Technologies
Assuming the 90 days horizon Thai Beverage Public is expected to generate 2.38 times more return on investment than NetSol Technologies. However, Thai Beverage is 2.38 times more volatile than NetSol Technologies. It trades about 0.02 of its potential returns per unit of risk. NetSol Technologies is currently generating about -0.01 per unit of risk. If you would invest 38.00 in Thai Beverage Public on November 3, 2024 and sell it today you would earn a total of 0.00 from holding Thai Beverage Public or generate 0.0% 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. NetSol Technologies
Performance |
| Timeline |
| Thai Beverage Public |
| NetSol Technologies |
Thai Beverage and NetSol Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Beverage and NetSol Technologies
The main advantage of trading using opposite Thai Beverage and NetSol Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Beverage position performs unexpectedly, NetSol Technologies 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 NetSol Technologies will offset losses from the drop in NetSol Technologies' long position.| Thai Beverage vs. Diageo plc | Thai Beverage vs. Pernod Ricard SA | Thai Beverage vs. Constellation Brands | Thai Beverage vs. Brown Forman |
| NetSol Technologies vs. Charter Communications | NetSol Technologies vs. Singapore Airlines Limited | NetSol Technologies vs. HEMISPHERE EGY | NetSol Technologies vs. International Consolidated Airlines |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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