Correlation Between BII Railway and Thai Beverage
Can any of the company-specific risk be diversified away by investing in both BII Railway 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 BII Railway and Thai Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BII Railway Transportation and Thai Beverage Public, you can compare the effects of market volatilities on BII Railway 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 BII Railway with a short position of Thai Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of BII Railway and Thai Beverage.
Diversification Opportunities for BII Railway and Thai Beverage
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BII and Thai is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding BII Railway Transportation and Thai Beverage Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Beverage Public and BII Railway 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 BII Railway Transportation 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 Public has no effect on the direction of BII Railway i.e., BII Railway and Thai Beverage go up and down completely randomly.
Pair Corralation between BII Railway and Thai Beverage
Assuming the 90 days horizon BII Railway Transportation is expected to generate 0.51 times more return on investment than Thai Beverage. However, BII Railway Transportation is 1.95 times less risky than Thai Beverage. It trades about 0.04 of its potential returns per unit of risk. Thai Beverage Public is currently generating about -0.03 per unit of risk. If you would invest 2.80 in BII Railway Transportation on December 27, 2024 and sell it today you would earn a total of 0.10 from holding BII Railway Transportation or generate 3.57% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
BII Railway Transportation vs. Thai Beverage Public
Performance |
Timeline |
BII Railway Transpor |
Thai Beverage Public |
BII Railway and Thai Beverage Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BII Railway and Thai Beverage
The main advantage of trading using opposite BII Railway and Thai Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BII Railway 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.BII Railway vs. KINGBOARD CHEMICAL | BII Railway vs. Quaker Chemical | BII Railway vs. Grupo Carso SAB | BII Railway vs. Sanyo Chemical Industries |
Thai Beverage vs. Diageo plc | Thai Beverage vs. Pernod Ricard SA | Thai Beverage vs. Constellation Brands | Thai Beverage vs. Brown Forman |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
Money Managers Screen money managers from public funds and ETFs managed around the world | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |