Correlation Between VULCAN MATERIALS and THAI BEVERAGE
Can any of the company-specific risk be diversified away by investing in both VULCAN MATERIALS and THAI BEVERAGE 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 VULCAN MATERIALS and THAI BEVERAGE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VULCAN MATERIALS and THAI BEVERAGE, you can compare the effects of market volatilities on VULCAN MATERIALS and THAI BEVERAGE 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 VULCAN MATERIALS with a short position of THAI BEVERAGE. Check out your portfolio center. Please also check ongoing floating volatility patterns of VULCAN MATERIALS and THAI BEVERAGE.
Diversification Opportunities for VULCAN MATERIALS and THAI BEVERAGE
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between VULCAN and THAI is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding VULCAN MATERIALS and THAI BEVERAGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THAI BEVERAGE and VULCAN MATERIALS 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 VULCAN MATERIALS are associated (or correlated) with THAI BEVERAGE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THAI BEVERAGE has no effect on the direction of VULCAN MATERIALS i.e., VULCAN MATERIALS and THAI BEVERAGE go up and down completely randomly.
Pair Corralation between VULCAN MATERIALS and THAI BEVERAGE
Assuming the 90 days trading horizon VULCAN MATERIALS is expected to generate 1.33 times less return on investment than THAI BEVERAGE. But when comparing it to its historical volatility, VULCAN MATERIALS is 2.11 times less risky than THAI BEVERAGE. It trades about 0.05 of its potential returns per unit of risk. THAI BEVERAGE is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 25.00 in THAI BEVERAGE on November 28, 2024 and sell it today you would earn a total of 10.00 from holding THAI BEVERAGE or generate 40.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VULCAN MATERIALS vs. THAI BEVERAGE
Performance |
| Timeline |
| VULCAN MATERIALS |
| THAI BEVERAGE |
VULCAN MATERIALS and THAI BEVERAGE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VULCAN MATERIALS and THAI BEVERAGE
The main advantage of trading using opposite VULCAN MATERIALS and THAI BEVERAGE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VULCAN MATERIALS position performs unexpectedly, THAI BEVERAGE 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 THAI BEVERAGE will offset losses from the drop in THAI BEVERAGE's long position.| VULCAN MATERIALS vs. Commonwealth Bank of | VULCAN MATERIALS vs. JSC Halyk bank | VULCAN MATERIALS vs. PRINCIPAL FINANCIAL | VULCAN MATERIALS vs. SINGAPORE AIRLINES |
| THAI BEVERAGE vs. Medical Properties Trust | THAI BEVERAGE vs. MEDICAL FACILITIES NEW | THAI BEVERAGE vs. Advanced Medical Solutions | THAI BEVERAGE vs. Clearside Biomedical |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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