Correlation Between Thai Beverage and Lifevantage
Can any of the company-specific risk be diversified away by investing in both Thai Beverage and Lifevantage 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 Lifevantage 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 Lifevantage, you can compare the effects of market volatilities on Thai Beverage and Lifevantage 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 Lifevantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Beverage and Lifevantage.
Diversification Opportunities for Thai Beverage and Lifevantage
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Thai and Lifevantage is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Thai Beverage PCL and Lifevantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifevantage 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 Lifevantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifevantage has no effect on the direction of Thai Beverage i.e., Thai Beverage and Lifevantage go up and down completely randomly.
Pair Corralation between Thai Beverage and Lifevantage
Assuming the 90 days horizon Thai Beverage PCL is expected to under-perform the Lifevantage. But the pink sheet apears to be less risky and, when comparing its historical volatility, Thai Beverage PCL is 2.74 times less risky than Lifevantage. The pink sheet trades about -0.07 of its potential returns per unit of risk. The Lifevantage is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 335.00 in Lifevantage on November 27, 2024 and sell it today you would earn a total of 1,348 from holding Lifevantage or generate 402.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 38.21% |
| Values | Daily Returns |
Thai Beverage PCL vs. Lifevantage
Performance |
| Timeline |
| Thai Beverage PCL |
| Lifevantage |
Thai Beverage and Lifevantage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Beverage and Lifevantage
The main advantage of trading using opposite Thai Beverage and Lifevantage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Beverage position performs unexpectedly, Lifevantage 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 Lifevantage will offset losses from the drop in Lifevantage'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 |
| Lifevantage vs. Seneca Foods Corp | Lifevantage vs. Central Garden Pet | Lifevantage vs. Central Garden Pet | Lifevantage vs. Lifeway Foods |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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