Correlation Between Thai Beverage and RCM TECHNOLOGIES
Can any of the company-specific risk be diversified away by investing in both Thai Beverage and RCM 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 RCM 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 RCM TECHNOLOGIES, you can compare the effects of market volatilities on Thai Beverage and RCM 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 RCM TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Beverage and RCM TECHNOLOGIES.
Diversification Opportunities for Thai Beverage and RCM TECHNOLOGIES
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Thai and RCM is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Thai Beverage Public and RCM TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RCM 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 RCM TECHNOLOGIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RCM TECHNOLOGIES has no effect on the direction of Thai Beverage i.e., Thai Beverage and RCM TECHNOLOGIES go up and down completely randomly.
Pair Corralation between Thai Beverage and RCM TECHNOLOGIES
Assuming the 90 days horizon Thai Beverage is expected to generate 2.0 times less return on investment than RCM TECHNOLOGIES. But when comparing it to its historical volatility, Thai Beverage Public is 1.18 times less risky than RCM TECHNOLOGIES. It trades about 0.06 of its potential returns per unit of risk. RCM TECHNOLOGIES is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,900 in RCM TECHNOLOGIES on August 28, 2024 and sell it today you would earn a total of 120.00 from holding RCM TECHNOLOGIES or generate 6.32% 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. RCM TECHNOLOGIES
Performance |
| Timeline |
| Thai Beverage Public |
| RCM TECHNOLOGIES |
Thai Beverage and RCM TECHNOLOGIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Beverage and RCM TECHNOLOGIES
The main advantage of trading using opposite Thai Beverage and RCM TECHNOLOGIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Beverage position performs unexpectedly, RCM 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 RCM TECHNOLOGIES will offset losses from the drop in RCM TECHNOLOGIES's long position.| Thai Beverage vs. LGI Homes | Thai Beverage vs. Hisense Home Appliances | Thai Beverage vs. MeVis Medical Solutions | Thai Beverage vs. Neinor Homes SA |
| RCM TECHNOLOGIES vs. Dairy Farm International | RCM TECHNOLOGIES vs. Federal Agricultural Mortgage | RCM TECHNOLOGIES vs. HYDROFARM HLD GRP | RCM TECHNOLOGIES vs. Daito Trust Construction |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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