Correlation Between Thai Beverage and USU Software
Can any of the company-specific risk be diversified away by investing in both Thai Beverage and USU Software 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 USU Software 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 USU Software AG, you can compare the effects of market volatilities on Thai Beverage and USU Software 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 USU Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Beverage and USU Software.
Diversification Opportunities for Thai Beverage and USU Software
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Thai and USU is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Thai Beverage Public and USU Software AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USU Software AG 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 USU Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USU Software AG has no effect on the direction of Thai Beverage i.e., Thai Beverage and USU Software go up and down completely randomly.
Pair Corralation between Thai Beverage and USU Software
Assuming the 90 days horizon Thai Beverage Public is expected to generate 2.8 times more return on investment than USU Software. However, Thai Beverage is 2.8 times more volatile than USU Software AG. It trades about 0.06 of its potential returns per unit of risk. USU Software AG is currently generating about 0.01 per unit of risk. If you would invest 16.00 in Thai Beverage Public on October 14, 2024 and sell it today you would earn a total of 25.00 from holding Thai Beverage Public or generate 156.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Thai Beverage Public vs. USU Software AG
Performance |
| Timeline |
| Thai Beverage Public |
| USU Software AG |
Thai Beverage and USU Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Beverage and USU Software
The main advantage of trading using opposite Thai Beverage and USU Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Beverage position performs unexpectedly, USU Software 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 USU Software will offset losses from the drop in USU Software's long position.| Thai Beverage vs. CARSALESCOM | Thai Beverage vs. CarsalesCom | Thai Beverage vs. Cal Maine Foods | Thai Beverage vs. EBRO FOODS |
| USU Software vs. MOLSON RS BEVERAGE | USU Software vs. Ebro Foods SA | USU Software vs. Thai Beverage Public | USU Software vs. CN MODERN DAIRY |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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