Correlation Between Thai Beverage and Shenzhen Investment
Can any of the company-specific risk be diversified away by investing in both Thai Beverage and Shenzhen Investment 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 Shenzhen Investment 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 Shenzhen Investment Limited, you can compare the effects of market volatilities on Thai Beverage and Shenzhen Investment 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 Shenzhen Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Beverage and Shenzhen Investment.
Diversification Opportunities for Thai Beverage and Shenzhen Investment
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Thai and Shenzhen is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Thai Beverage Public and Shenzhen Investment Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Investment 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 Shenzhen Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Investment has no effect on the direction of Thai Beverage i.e., Thai Beverage and Shenzhen Investment go up and down completely randomly.
Pair Corralation between Thai Beverage and Shenzhen Investment
Assuming the 90 days horizon Thai Beverage Public is expected to generate 1.03 times more return on investment than Shenzhen Investment. However, Thai Beverage is 1.03 times more volatile than Shenzhen Investment Limited. It trades about 0.05 of its potential returns per unit of risk. Shenzhen Investment Limited is currently generating about 0.01 per unit of risk. If you would invest 16.00 in Thai Beverage Public on October 27, 2024 and sell it today you would earn a total of 21.00 from holding Thai Beverage Public or generate 131.25% 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. Shenzhen Investment Limited
Performance |
| Timeline |
| Thai Beverage Public |
| Shenzhen Investment |
Thai Beverage and Shenzhen Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Beverage and Shenzhen Investment
The main advantage of trading using opposite Thai Beverage and Shenzhen Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Beverage position performs unexpectedly, Shenzhen Investment 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 Shenzhen Investment will offset losses from the drop in Shenzhen Investment's long position.| Thai Beverage vs. Diageo plc | Thai Beverage vs. Pernod Ricard SA | Thai Beverage vs. Constellation Brands | Thai Beverage vs. Brown Forman |
| Shenzhen Investment vs. China Overseas Land | Shenzhen Investment vs. Mitsui Fudosan Co | Shenzhen Investment vs. Sino Land | Shenzhen Investment vs. Hongkong Land Holdings |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |