Correlation Between THAI BEVERAGE and MONGOLIAN MINING

Can any of the company-specific risk be diversified away by investing in both THAI BEVERAGE and MONGOLIAN MINING 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 MONGOLIAN MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between THAI BEVERAGE and MONGOLIAN MINING CRPREGS, you can compare the effects of market volatilities on THAI BEVERAGE and MONGOLIAN MINING 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 MONGOLIAN MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of THAI BEVERAGE and MONGOLIAN MINING.

Diversification Opportunities for THAI BEVERAGE and MONGOLIAN MINING

0.09

Correlation Coefficient

THAI BEVERAGE  MONGOLIAN MINING

Significant diversification

The 3 months correlation between THAI and MONGOLIAN is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding THAI BEVERAGE and MONGOLIAN MINING CRPREGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MONGOLIAN MINING CRPREGS 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 are associated (or correlated) with MONGOLIAN MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MONGOLIAN MINING CRPREGS has no effect on the direction of THAI BEVERAGE i.e., THAI BEVERAGE and MONGOLIAN MINING go up and down completely randomly.

Pair Corralation between THAI BEVERAGE and MONGOLIAN MINING

Assuming the 90 days trading horizon THAI BEVERAGE is expected to generate 2.65 times less return on investment than MONGOLIAN MINING. But when comparing it to its historical volatility, THAI BEVERAGE is 1.29 times less risky than MONGOLIAN MINING. It trades about 0.04 of its potential returns per unit of risk. MONGOLIAN MINING CRPREGS is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  78.00  in MONGOLIAN MINING CRPREGS on September 14, 2024 and sell it today you would earn a total of  14.00  from holding MONGOLIAN MINING CRPREGS or generate 17.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

THAI BEVERAGE  vs.  MONGOLIAN MINING CRPREGS

THAI BEVERAGE

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in THAI BEVERAGE are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, THAI BEVERAGE may actually be approaching a critical reversion point that can send shares even higher in January 2025.

MONGOLIAN MINING CRPREGS

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MONGOLIAN MINING CRPREGS are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, MONGOLIAN MINING reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with THAI BEVERAGE and MONGOLIAN MINING

The main advantage of trading using opposite THAI BEVERAGE and MONGOLIAN MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THAI BEVERAGE position performs unexpectedly, MONGOLIAN MINING 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 MONGOLIAN MINING will offset losses from the drop in MONGOLIAN MINING's long position.

The idea behind THAI BEVERAGE and MONGOLIAN MINING CRPREGS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.