Correlation Between Thai Beverage and Better World
Can any of the company-specific risk be diversified away by investing in both Thai Beverage and Better World 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 Better World 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 Better World Acquisition, you can compare the effects of market volatilities on Thai Beverage and Better World 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 Better World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Beverage and Better World.
Diversification Opportunities for Thai Beverage and Better World
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Thai and Better is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Thai Beverage PCL and Better World Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Better World Acquisition 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 Better World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Better World Acquisition has no effect on the direction of Thai Beverage i.e., Thai Beverage and Better World go up and down completely randomly.
Pair Corralation between Thai Beverage and Better World
Assuming the 90 days horizon Thai Beverage PCL is expected to under-perform the Better World. In addition to that, Thai Beverage is 2.04 times more volatile than Better World Acquisition. It trades about -0.06 of its total potential returns per unit of risk. Better World Acquisition is currently generating about -0.03 per unit of volatility. If you would invest 1,051 in Better World Acquisition on September 14, 2024 and sell it today you would lose (49.00) from holding Better World Acquisition or give up 4.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 48.15% |
| Values | Daily Returns |
Thai Beverage PCL vs. Better World Acquisition
Performance |
| Timeline |
| Thai Beverage PCL |
| Better World Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Thai Beverage and Better World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Beverage and Better World
The main advantage of trading using opposite Thai Beverage and Better World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Beverage position performs unexpectedly, Better World 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 Better World will offset losses from the drop in Better World's long position.| Thai Beverage vs. Andrew Peller Limited | Thai Beverage vs. Aristocrat Group Corp | Thai Beverage vs. Iconic Brands | Thai Beverage vs. Naked Wines plc |
| Better World vs. Sea | Better World vs. Thai Beverage PCL | Better World vs. Cardinal Health | Better World vs. Fomento Economico Mexicano |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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