Correlation Between Thai Beverage and Andrew Peller
Can any of the company-specific risk be diversified away by investing in both Thai Beverage and Andrew Peller 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 Andrew Peller into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thai Beverage Public and Andrew Peller Limited, you can compare the effects of market volatilities on Thai Beverage and Andrew Peller 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 Andrew Peller. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Beverage and Andrew Peller.
Diversification Opportunities for Thai Beverage and Andrew Peller
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Thai and Andrew is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Thai Beverage Public and Andrew Peller Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Andrew Peller Limited 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 Public are associated (or correlated) with Andrew Peller. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Andrew Peller Limited has no effect on the direction of Thai Beverage i.e., Thai Beverage and Andrew Peller go up and down completely randomly.
Pair Corralation between Thai Beverage and Andrew Peller
Assuming the 90 days horizon Thai Beverage Public is expected to generate 6.88 times more return on investment than Andrew Peller. However, Thai Beverage is 6.88 times more volatile than Andrew Peller Limited. It trades about 0.05 of its potential returns per unit of risk. Andrew Peller Limited is currently generating about -0.06 per unit of risk. If you would invest 39.00 in Thai Beverage Public on September 25, 2024 and sell it today you would earn a total of 1.00 from holding Thai Beverage Public or generate 2.56% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Thai Beverage Public vs. Andrew Peller Limited
Performance |
Timeline |
Thai Beverage Public |
Andrew Peller Limited |
Thai Beverage and Andrew Peller Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Thai Beverage and Andrew Peller
The main advantage of trading using opposite Thai Beverage and Andrew Peller positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Beverage position performs unexpectedly, Andrew Peller 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 Andrew Peller will offset losses from the drop in Andrew Peller's long position.Thai Beverage vs. Aristocrat Group Corp | ||
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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