Correlation Between Thai Beverage and Sunny Optical
Can any of the company-specific risk be diversified away by investing in both Thai Beverage and Sunny Optical 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 Sunny Optical 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 Sunny Optical Technology, you can compare the effects of market volatilities on Thai Beverage and Sunny Optical 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 Sunny Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Beverage and Sunny Optical.
Diversification Opportunities for Thai Beverage and Sunny Optical
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Thai and Sunny is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Thai Beverage Public and Sunny Optical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunny Optical Technology 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 Sunny Optical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunny Optical Technology has no effect on the direction of Thai Beverage i.e., Thai Beverage and Sunny Optical go up and down completely randomly.
Pair Corralation between Thai Beverage and Sunny Optical
Assuming the 90 days horizon Thai Beverage Public is expected to generate 0.95 times more return on investment than Sunny Optical. However, Thai Beverage Public is 1.05 times less risky than Sunny Optical. It trades about 0.15 of its potential returns per unit of risk. Sunny Optical Technology is currently generating about -0.06 per unit of risk. If you would invest 38.00 in Thai Beverage Public on October 13, 2024 and sell it today you would earn a total of 3.00 from holding Thai Beverage Public or generate 7.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Beverage Public vs. Sunny Optical Technology
Performance |
| Timeline |
| Thai Beverage Public |
| Sunny Optical Technology |
Thai Beverage and Sunny Optical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Beverage and Sunny Optical
The main advantage of trading using opposite Thai Beverage and Sunny Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Beverage position performs unexpectedly, Sunny Optical 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 Sunny Optical will offset losses from the drop in Sunny Optical's long position.| Thai Beverage vs. CARSALESCOM | Thai Beverage vs. CarsalesCom | Thai Beverage vs. Cal Maine Foods | Thai Beverage vs. EBRO FOODS |
| Sunny Optical vs. INDOFOOD AGRI RES | Sunny Optical vs. Datadog | Sunny Optical vs. DATATEC LTD 2 | Sunny Optical vs. Thai Beverage Public |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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