Correlation Between Thai Beverage and Union Pacific
Can any of the company-specific risk be diversified away by investing in both Thai Beverage and Union Pacific 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 Union Pacific 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 Union Pacific, you can compare the effects of market volatilities on Thai Beverage and Union Pacific 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 Union Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Beverage and Union Pacific.
Diversification Opportunities for Thai Beverage and Union Pacific
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Thai and Union is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Thai Beverage Public and Union Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Pacific 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 Union Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Pacific has no effect on the direction of Thai Beverage i.e., Thai Beverage and Union Pacific go up and down completely randomly.
Pair Corralation between Thai Beverage and Union Pacific
Assuming the 90 days horizon Thai Beverage is expected to generate 3.97 times less return on investment than Union Pacific. In addition to that, Thai Beverage is 2.52 times more volatile than Union Pacific. It trades about 0.02 of its total potential returns per unit of risk. Union Pacific is currently generating about 0.19 per unit of volatility. If you would invest 22,250 in Union Pacific on November 7, 2024 and sell it today you would earn a total of 1,365 from holding Union Pacific or generate 6.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Beverage Public vs. Union Pacific
Performance |
| Timeline |
| Thai Beverage Public |
| Union Pacific |
Thai Beverage and Union Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Beverage and Union Pacific
The main advantage of trading using opposite Thai Beverage and Union Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Beverage position performs unexpectedly, Union Pacific 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 Union Pacific will offset losses from the drop in Union Pacific's long position.| Thai Beverage vs. COMMERCIAL VEHICLE | Thai Beverage vs. CARSALESCOM | Thai Beverage vs. GRUPO CARSO A1 | Thai Beverage vs. RYANAIR HLDGS ADR |
| Union Pacific vs. CyberArk Software | Union Pacific vs. Constellation Software | Union Pacific vs. VITEC SOFTWARE GROUP | Union Pacific vs. ASPEN TECHINC DL |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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