Correlation Between Thai Vegetable and Nova Organic
Can any of the company-specific risk be diversified away by investing in both Thai Vegetable and Nova Organic 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 Vegetable and Nova Organic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thai Vegetable Oil and Nova Organic PCL, you can compare the effects of market volatilities on Thai Vegetable and Nova Organic 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 Vegetable with a short position of Nova Organic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Vegetable and Nova Organic.
Diversification Opportunities for Thai Vegetable and Nova Organic
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Thai and Nova is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Thai Vegetable Oil and Nova Organic PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nova Organic PCL and Thai Vegetable 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 Vegetable Oil are associated (or correlated) with Nova Organic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nova Organic PCL has no effect on the direction of Thai Vegetable i.e., Thai Vegetable and Nova Organic go up and down completely randomly.
Pair Corralation between Thai Vegetable and Nova Organic
Assuming the 90 days trading horizon Thai Vegetable Oil is expected to generate 22.39 times more return on investment than Nova Organic. However, Thai Vegetable is 22.39 times more volatile than Nova Organic PCL. It trades about 0.08 of its potential returns per unit of risk. Nova Organic PCL is currently generating about -0.03 per unit of risk. If you would invest 2,535 in Thai Vegetable Oil on September 14, 2024 and sell it today you would lose (245.00) from holding Thai Vegetable Oil or give up 9.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Vegetable Oil vs. Nova Organic PCL
Performance |
| Timeline |
| Thai Vegetable Oil |
| Nova Organic PCL |
Thai Vegetable and Nova Organic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Vegetable and Nova Organic
The main advantage of trading using opposite Thai Vegetable and Nova Organic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Vegetable position performs unexpectedly, Nova Organic 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 Nova Organic will offset losses from the drop in Nova Organic's long position.| Thai Vegetable vs. Thai Union Group | Thai Vegetable vs. Charoen Pokphand Foods | Thai Vegetable vs. CP ALL Public | Thai Vegetable vs. Intouch Holdings Public |
| Nova Organic vs. North East Rubbers | Nova Organic vs. RB Food Supply | Nova Organic vs. Osotspa Public | Nova Organic vs. The ONE Enterprise |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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