Correlation Between Thai Beverage and LEROY SEAFOOD
Can any of the company-specific risk be diversified away by investing in both Thai Beverage and LEROY SEAFOOD 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 LEROY SEAFOOD 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 LEROY SEAFOOD GRUNSPADR, you can compare the effects of market volatilities on Thai Beverage and LEROY SEAFOOD 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 LEROY SEAFOOD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Beverage and LEROY SEAFOOD.
Diversification Opportunities for Thai Beverage and LEROY SEAFOOD
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Thai and LEROY is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Thai Beverage Public and LEROY SEAFOOD GRUNSPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LEROY SEAFOOD GRUNSPADR 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 LEROY SEAFOOD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LEROY SEAFOOD GRUNSPADR has no effect on the direction of Thai Beverage i.e., Thai Beverage and LEROY SEAFOOD go up and down completely randomly.
Pair Corralation between Thai Beverage and LEROY SEAFOOD
Assuming the 90 days horizon Thai Beverage Public is expected to generate 1.82 times more return on investment than LEROY SEAFOOD. However, Thai Beverage is 1.82 times more volatile than LEROY SEAFOOD GRUNSPADR. It trades about 0.03 of its potential returns per unit of risk. LEROY SEAFOOD GRUNSPADR is currently generating about 0.01 per unit of risk. If you would invest 36.00 in Thai Beverage Public on October 24, 2024 and sell it today you would earn a total of 1.00 from holding Thai Beverage Public or generate 2.78% 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. LEROY SEAFOOD GRUNSPADR
Performance |
| Timeline |
| Thai Beverage Public |
| LEROY SEAFOOD GRUNSPADR |
Thai Beverage and LEROY SEAFOOD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Beverage and LEROY SEAFOOD
The main advantage of trading using opposite Thai Beverage and LEROY SEAFOOD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Beverage position performs unexpectedly, LEROY SEAFOOD 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 LEROY SEAFOOD will offset losses from the drop in LEROY SEAFOOD's long position.| Thai Beverage vs. Hemisphere Energy Corp | Thai Beverage vs. ecotel communication ag | Thai Beverage vs. Adtalem Global Education | Thai Beverage vs. Charter Communications |
| LEROY SEAFOOD vs. Nestl SA | LEROY SEAFOOD vs. General Mills | LEROY SEAFOOD vs. General Mills | LEROY SEAFOOD vs. Danone SA |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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