Correlation Between Thai Beverage and Western Acquisition
Can any of the company-specific risk be diversified away by investing in both Thai Beverage and Western Acquisition 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 Western Acquisition 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 Western Acquisition Ventures, you can compare the effects of market volatilities on Thai Beverage and Western Acquisition 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 Western Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Beverage and Western Acquisition.
Diversification Opportunities for Thai Beverage and Western Acquisition
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Thai and Western is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Thai Beverage PCL and Western Acquisition Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western 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 Western Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Acquisition has no effect on the direction of Thai Beverage i.e., Thai Beverage and Western Acquisition go up and down completely randomly.
Pair Corralation between Thai Beverage and Western Acquisition
Assuming the 90 days horizon Thai Beverage PCL is expected to under-perform the Western Acquisition. But the pink sheet apears to be less risky and, when comparing its historical volatility, Thai Beverage PCL is 1.17 times less risky than Western Acquisition. The pink sheet trades about -0.08 of its potential returns per unit of risk. The Western Acquisition Ventures is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,140 in Western Acquisition Ventures on September 12, 2024 and sell it today you would earn a total of 14.00 from holding Western Acquisition Ventures or generate 1.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 47.09% |
| Values | Daily Returns |
Thai Beverage PCL vs. Western Acquisition Ventures
Performance |
| Timeline |
| Thai Beverage PCL |
| Western Acquisition |
Thai Beverage and Western Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Beverage and Western Acquisition
The main advantage of trading using opposite Thai Beverage and Western Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Beverage position performs unexpectedly, Western Acquisition 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 Western Acquisition will offset losses from the drop in Western Acquisition'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 |
| Western Acquisition vs. Thai Beverage PCL | Western Acquisition vs. East Africa Metals | Western Acquisition vs. Royalty Management Holding | Western Acquisition vs. Mangazeya Mining |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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