Correlation Between Thai Beverage and Sony Group
Can any of the company-specific risk be diversified away by investing in both Thai Beverage and Sony Group 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 Sony Group 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 Sony Group, you can compare the effects of market volatilities on Thai Beverage and Sony Group 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 Sony Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Beverage and Sony Group.
Diversification Opportunities for Thai Beverage and Sony Group
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Thai and Sony is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Thai Beverage Public and Sony Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sony Group 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 Sony Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sony Group has no effect on the direction of Thai Beverage i.e., Thai Beverage and Sony Group go up and down completely randomly.
Pair Corralation between Thai Beverage and Sony Group
Assuming the 90 days horizon Thai Beverage Public is expected to under-perform the Sony Group. In addition to that, Thai Beverage is 1.97 times more volatile than Sony Group. It trades about -0.05 of its total potential returns per unit of risk. Sony Group is currently generating about -0.06 per unit of volatility. If you would invest 1,960 in Sony Group on October 21, 2024 and sell it today you would lose (50.00) from holding Sony Group or give up 2.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Beverage Public vs. Sony Group
Performance |
| Timeline |
| Thai Beverage Public |
| Sony Group |
Thai Beverage and Sony Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Beverage and Sony Group
The main advantage of trading using opposite Thai Beverage and Sony Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Beverage position performs unexpectedly, Sony Group 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 Sony Group will offset losses from the drop in Sony Group's long position.| Thai Beverage vs. EAT WELL INVESTMENT | Thai Beverage vs. Sumitomo Mitsui Construction | Thai Beverage vs. Chongqing Machinery Electric | Thai Beverage vs. PennantPark Investment |
| Sony Group vs. Apple Inc | Sony Group vs. Apple Inc | Sony Group vs. Samsung Electronics Co | Sony Group vs. Samsung Electronics Co |
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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