Correlation Between Thai Beverage and XIAO I
Can any of the company-specific risk be diversified away by investing in both Thai Beverage and XIAO I 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 XIAO I into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thai Beverage PCL and XIAO I American, you can compare the effects of market volatilities on Thai Beverage and XIAO I 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 XIAO I. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Beverage and XIAO I.
Diversification Opportunities for Thai Beverage and XIAO I
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Thai and XIAO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Thai Beverage PCL and XIAO I American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XIAO I American 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 PCL are associated (or correlated) with XIAO I. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XIAO I American has no effect on the direction of Thai Beverage i.e., Thai Beverage and XIAO I go up and down completely randomly.
Pair Corralation between Thai Beverage and XIAO I
Assuming the 90 days horizon Thai Beverage PCL is expected to generate 0.25 times more return on investment than XIAO I. However, Thai Beverage PCL is 3.92 times less risky than XIAO I. It trades about -0.06 of its potential returns per unit of risk. XIAO I American is currently generating about -0.03 per unit of risk. If you would invest 5,200 in Thai Beverage PCL on September 2, 2024 and sell it today you would lose (1,833) from holding Thai Beverage PCL or give up 35.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 68.42% |
| Values | Daily Returns |
Thai Beverage PCL vs. XIAO I American
Performance |
| Timeline |
| Thai Beverage PCL |
| XIAO I American |
Thai Beverage and XIAO I Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Beverage and XIAO I
The main advantage of trading using opposite Thai Beverage and XIAO I positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Beverage position performs unexpectedly, XIAO I 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 XIAO I will offset losses from the drop in XIAO I's long position.| Thai Beverage vs. Diageo PLC ADR | Thai Beverage vs. Pernod Ricard SA | Thai Beverage vs. Constellation Brands Class | Thai Beverage vs. Brown Forman |
| XIAO I vs. Jacobs Solutions | XIAO I vs. Highway Holdings Limited | XIAO I vs. ChampionX | XIAO I vs. Summit Materials |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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