Correlation Between Western Acquisition and Thai Beverage
Can any of the company-specific risk be diversified away by investing in both Western Acquisition 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 Western Acquisition and Thai Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Acquisition Ventures and Thai Beverage PCL, you can compare the effects of market volatilities on Western Acquisition 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 Western Acquisition with a short position of Thai Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Acquisition and Thai Beverage.
Diversification Opportunities for Western Acquisition and Thai Beverage
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Western and Thai is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Western Acquisition Ventures and Thai Beverage PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Beverage PCL and Western Acquisition 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 Western Acquisition Ventures 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 PCL has no effect on the direction of Western Acquisition i.e., Western Acquisition and Thai Beverage go up and down completely randomly.
Pair Corralation between Western Acquisition and Thai Beverage
Assuming the 90 days horizon Western Acquisition Ventures is expected to generate 1.17 times more return on investment than Thai Beverage. However, Western Acquisition is 1.17 times more volatile than Thai Beverage PCL. It trades about 0.01 of its potential returns per unit of risk. Thai Beverage PCL is currently generating about -0.08 per unit of risk. 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 |
Western Acquisition Ventures vs. Thai Beverage PCL
Performance |
| Timeline |
| Western Acquisition |
| Thai Beverage PCL |
Western Acquisition and Thai Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Acquisition and Thai Beverage
The main advantage of trading using opposite Western Acquisition and Thai Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Acquisition 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.| Western Acquisition vs. Thai Beverage PCL | Western Acquisition vs. East Africa Metals | Western Acquisition vs. Royalty Management Holding | Western Acquisition vs. Mangazeya Mining |
| Thai Beverage vs. Andrew Peller Limited | Thai Beverage vs. Aristocrat Group Corp | Thai Beverage vs. Iconic Brands | Thai Beverage vs. Naked Wines plc |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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